07.10.202614:06:26UTC+00TSX Falls as Banks and Miners Retreat

The S&P/TSX Composite Index fell more than 1% to trade below 35,500 on Wednesday, pressured by elevated oil prices and rising bond yields. Crude oil advanced on persistent risks to energy supplies from the Middle East, stoking inflation concerns and reinforcing expectations that interest rates will remain higher for longer. The move intensified the impact of increased US deficit spending on already elevated domestic yields.

Canadian government bonds declined, pushing yields higher and weighing on interest rate–sensitive stocks. Royal Bank of Canada dropped more than 1.5%, while Toronto-Dominion Bank, Bank of Montreal, Scotiabank, and CIBC each fell by roughly 2%. Money markets are now pricing in at least one additional 25-basis-point rate hike from the Bank of Canada by year-end.

Gold prices retreated, dragging down mining shares, with Agnico Eagle, Barrick Gold, Wheaton Precious Metals, and Franco-Nevada each sliding about 3%. In contrast, energy producers benefited from the renewed oil rally, with Suncor Energy, Imperial Oil, and Cenovus Energy all gaining more than 1%.