Investing.com - Canada’s major stock indexes closed lower on Tuesday, after equities rallied for a second consecutive day on Monday.
By the 4:00 ET close, the S&P/TSX 60 index decreased 5.3 points or 0.4%.
The Toronto Stock Exchange’s S&P/TSX composite index fell 79 points or 0.3%, after advancing by 231.71 points or 0.9% on Monday, extending a recovery from a four-and-a-half-month low last Thursday.
Statistics Canada offered February’s CPI report on Tuesday, in which CPI jumped 2.6% in February, surpassing analyst expectations of a 2.1% increase.
Markets were given a reprieve after a bout of selling, analysts cited by Reuters noted. Traders were also gauging data showing a slight bounce in retail sales in February -- albeit below expectations -- and took some relief from a stoppage in what has recently been a near-constant stream of developments around U.S. President Donald Trump’s tariff plans.
However, a forecast from the OECD flagged that Trump’s plans to hike levies will hit growth in Canada, Mexico, and the United States while also pushing up inflationary pressures.
Analysts at Capital Economics argued that the outlook for Canadian financial markets widely depends on the reaction by the Bank of Canada to any fallout from the U.S. tariffs. Last week, the BoC slashed interest rates by 25 basis points and raised worries over inflation and weaker growth from the duties.
U.S. stocks fall
U.S. stocks slipped til closing on Tuesday, amid cautious trading ahead of this week’s Federal Reserve meeting.
On the day, the Dow Jones Industrial Average had fallen by 260.3 points, or 0.6%, the S&P 500 edged down by 60.5 points or 1.1%, and the NASDAQ Composite dropped 304.6 points, or 1.7%.
Wall Street indexes closed higher on Monday. The S&P 500 rose 0.6%, the NASDAQ Composite added 0.3%, and the Dow Jones Industrial Average moved up by 0.9%.
"[T]echnical conditions continue to favor bulls in the immediate term, although this source of upside pressure is being exhausted," analysts at Vital Knowledge said in a note to clients.
Oil falls
Oil prices fell on Tuesday, curtailing the previous session’s gains after Israel launched airstrikes across Gaza, reigniting hostilities after stalled hostage negotiations.
As of 5:00 ET, Crude Oil WTI Futures were down 1.2% to $66.56 a barrel, while Brent Oil Futures dropped 1% to $70.37 a barrel.
Both contracts gained just under 1% on Monday, buoyed by geopolitical tensions in the Red Sea, and optimism surrounding China’s plan to boost consumption.
Israel launched extensive airstrikes across the Gaza Strip on Tuesday, marking the most significant escalation since the January ceasefire, with Prime Minister Benjamin Netanyahu authorizing the operations following stalled negotiations to extend the ceasefire and unresolved hostage situations.
Gold notches record high, continues rise
Gold prices hit another record high above $3,000 on Tuesday as heightened geopolitical ructions in the Middle East -- particularly the breaching of the Israel-Hamas ceasefire -- fueled safe haven demand.
By 5:00 ET, Gold Futures were up 1.2% to $3,041.60.
Safe haven demand also remained underpinned by persistent uncertainty over Trump’s trade tariffs and fears over a possibly cooling U.S. economy. Anticipation over a slew of key central bank meetings this week also kept investors geared towards safe havens.