Investing.com – Canada’s main stock index was lower on Thursday, as investors gauged a selloff in software stocks this week and a renewed drop in precious metal prices.
The S&P/TSX composite index shed 576 points or 1.77% at 31,994.60.
Index rose by 0.6% to 32,571.55 on Wednesday, notching its third straight positive session. Traders have been warily watching software stocks, with worries swirling around the potential disruption posed to these businesses by artificial intelligence.
U.S. stocks drop
The benchmark S&P 500 index slid 1.2% to close at 6,799.99 points, while the tech-heavy slumped 1.6% to conclude at 22,540.59 points. The blue-chip shed 1.2% to settle at 48,908.41 points.
The main averages on Wall Street closed in a mixed fashion on Wednesday in volatile trading, with the previous session, as the S&P 500 and the NASDAQ Composite slid 0.5% and 1.5%, respectively, as the tech rout intensified. However, the Dow Jones Industrial Average added 260 points, or 0.5%.
Tech sector remains in focus
Technology and AI-related stocks have been at the main focus of investors’ attention of late amid concerns over how advances in artificial intelligence might disrupt traditional business models and compress margins for established players.
released its quarterly earnings after the bell, with the Google parent reporting solid quarterly returns that signaled that the company is beginning to reap tangible rewards from its big bets on AI.
“Overall, we’re seeing our AI investments and infrastructure drive revenue and growth across the board,” CEO Sundar Pichai said.
Google’s Gemini AI tool, a direct rival of ChatGPT, notched 750 million monthly active users in the December quarter, approaching the over 800 million disclosed by ChatGPT in October.
Executives at Alphabet hinted at a possible doubling of capital expenditures this year to between $175 billion and $185 billion, reflecting its ongoing push to rapidly build out the high-end data centers and chips underpinning AI models.
Elsewhere, forecast second-quarter revenue and profit below Wall Street estimates, citing a global memory chip shortage that is expected to dampen mobile phone sales and broader device demand.
Weekly jobless claims in spotlight
Away from the corporate sector, investors will also study weekly jobless claims data, which will provide another near-term read on labor market conditions before the delayed government nonfarm payrolls report.
ADP data, on Wednesday, showed that private employment rose by 22,000 jobs last month, well below the 50,000 jobs gain expected, after a downwardly revised 37,000 increase in December.
Additionally, the Trump administration is moving to make it easier to potentially dismiss career officials in senior government roles, a step that could affect about 50,000 federal workers, the Wall Street Journal reported on Thursday, citing people familiar with the matter.
The Federal Reserve left its benchmark rate unchanged last week at 3.5% to 3.75% after implementing three consecutive rate cuts in 2025.
Fed Governor Lisa Cook on Wednesday said she feels the policy interest rate now is only mildly restrictive, and signaled she supports taking time before reducing interest rates further.
“We put a lot of easing into the pipeline at the end of last year and I think that given where the labor market is, where inflation is, this is the right time to sit back and wait to see what happens,” Cook said at the Economic Club of Miami. “This rise in the price level should be temporary given the tariffs. So we’d like to see us get back to a disinflationary path, so I think it’s mildly restrictive but ever so mildly restrictive.”
slips
Gold prices fell, reversing earlier gains, while plummeted in a sharp reversal of a short-lived rebound seen this week.
A rout in metal markets largely resumed after a brief respite this week, as strength in the U.S. dollar, ahead of the central bank meetings in Europe, weighed on the sector.
Silver was by far the worst performer in metals, with spot silver tumbling as much as 16% to $73.5565/oz in Asian trade. Silver futures for March tumbled by a similar margin, hitting an intraday low of $73.383/oz.
Oil falls
Oil prices also fell sharply after the U.S. and Iran agreed to hold talks in Oman on Friday, easing concerns of a military conflict between the two countries that could disrupt supply from the region.
Brent oil futures for April slumped 1.5% to $68.42 a barrel and West Texas Intermediate crude futures fell 1.5% to $64.14 a barrel.
Both benchmarks rose around 3% on Wednesday on indications the planned talks between the United States and Iran on Friday could collapse.