Canadian stocks just logged their roughest day in nearly three months after the US carried out fresh strikes on Iran, a flare-up that stoked inflation worries and flipped markets into risk-off mode. In Toronto, the view from Brian Madden of First Avenue Investment Counsel, where he is chief investment officer, was "Broad risk-off and inflation fears," and he added "technology being the obvious scapegoat,". A global bond selloff pushed yields higher, and traders are wagering the Federal Reserve might have to bring rate hikes forward to keep a lid on inflation.
Shopify did the most damage to the index, sliding 4.7%. The biggest Canadian banks also sagged, with Toronto-Dominion Bank and Bank of Montreal each off almost 1%, while National Bank of Canada slipped 1.5%. Industrials struggled too. Finning International Inc. - a dealer for Caterpillar Inc.'s mining and construction equipment - was among the session's weakest names with a drop of more than 6%.
Gold stocks retreated as bullion fell more than 2%. Agnico Eagle Mines Ltd. and Barrick Mining Corp. declined alongside the metal. As Madden noted, "Gold has been kind of inverse to energy for much of the time since the war started."
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A 1.2% TSX dip won't make or break a long-term plan, but the combo of geopolitics, rising yields and shifting rate expectations can reshuffle what is working right now. If tech takes the blame and gold cools when yields climb, it is a reminder that leadership can rotate fast when the macro picture changes.
