Canada's primary stock benchmark experienced a significant downturn on Thursday, closing at its weakest level in two weeks as investor concerns about the returns from massive artificial intelligence investments overshadowed Nvidia's positive earnings report.
Market Performance Details
The S&P/TSX Composite Index concluded the trading session down 371.86 points, representing a 1.2% decline, to settle at 29,906.55. This marks the index's poorest closing performance since November 6, mirroring similar downward movements in Wall Street's main indexes where early enthusiasm from Nvidia's results quickly faded.
Market analysts noted that despite Nvidia's strong earnings, investors remain skeptical about whether the enormous capital expenditures directed toward artificial intelligence infrastructure will generate adequate returns in the foreseeable future.
Sector-Specific Declines
The materials sector, which encompasses metal mining companies, suffered the most substantial losses, plummeting 4.5% as both gold and copper prices retreated. This significant drop in commodity prices contributed heavily to the overall market decline.
Technology shares didn't escape the downturn either, with the sector falling 2.6% overall. Particularly hard-hit was electronics equipment manufacturer Celestica Inc, whose shares tumbled 9.5% during the session.
Broader Market Impact and Exceptions
Of the ten major sectors comprising the TSX, nine finished in negative territory. The sole exception was consumer staples, which managed a 0.9% gain, bolstered by food retail giant Loblaw Companies Ltd, which saw its shares advance 1.4%.
Another positive performer was Altus Group Ltd, a real estate services company that witnessed its shares jump 5.4% after providing strategic updates during an Investor Day presentation.
The market sentiment was further influenced by mixed U.S. employment data, which showed job growth acceleration in September but also indicated a labor market struggling to keep pace with new job-seekers amid the implementation of import tariffs and AI integration into various roles.
Michael Sprung, president at Sprung Investment Management, captured the prevailing market anxiety, noting that substantial capital expenditures flowing into AI technologies lack concrete evidence of near-term payback, creating uncertainty about future demand for materials and technology resources.
