S&P/TSX Composite and U.S. Markets Decline on Year-End Adjustments

Ian Bickis, The Canadian Press

TORONTO — On Friday, Canada's main stock index, the S&P/TSX composite, and U.S. markets ended the trading day lower primarily due to losses in the tech sector. Investors have begun making year-end adjustments to their portfolios, leading to a decline in stock values.

The S&P/TSX composite index closed down 50.42 points, finishing the day at 24,796.40.

In the United States, the Dow Jones industrial average fell by 333.59 points, ending at 42,992.21. The S&P 500 index dropped by 66.75 points to close at 5,970.84, while the Nasdaq composite experienced a significant decrease, down 298.33 points to 19,722.03.

Throughout the day, all markets exhibited larger initial losses before experiencing a slight recovery during late trading sessions.

On the TSX, the information technology sector was the hardest hit, declining by 0.9 percent. Other sectors, such as utilities and industrials, also saw losses.

In the U.S. tech sector, major companies faced declines, with Nvidia Corp. down just over two percent and Microsoft Corp. falling by 1.7 percent.

Market analysts suggested that the losses were largely driven by end-of-year rebalancing instead of negative outlooks for the tech sector. Mike Archibald, vice-president and portfolio manager at AGF Investments Inc., noted that the profitable performance of stocks this year led to some profit-taking among large institutional investors.

Archibald stated, “Given how well stocks have done this year, there’s certainly going to be some profit-taking from larger pensions, institutions and other clients, to probably rebalance. I don’t think there’s anything too nefarious about the move today. It just happens to be, you know, a little bit of profit-taking from some of the real big winners.”

This profit-taking trend is particularly visible in the so-called “magnificent seven” tech stocks, which have significantly boosted market gains this year.

Moreover, aside from the major tech stocks, more speculative investments such as bitcoin and micro-cap stocks have also seen declines recently, indicating a possible reduction in risk appetite among investors. Archibald mentioned, “In the last couple of weeks, we’ve seen a bit of a rollover in some of those assets, so we continue to watch those as they can be a bit of a tell for short-term trading patterns. So we’ll see what that means as we move towards 2025.”

In currency markets, the Canadian dollar traded at 69.37 cents U.S. compared to 69.51 cents U.S. earlier in the week.

In commodity markets, the February crude oil contract rose by 98 cents, reaching US$70.60 per barrel. The February natural gas contract increased by six cents to US$3.38 per mmBTU.

However, the February gold contract dropped by US$22, ending at US$2,631.90 an ounce, while the March copper contract experienced a slight decrease of less than a penny, trading at US$4.12 a pound.

This report by The Canadian Press was first published on December 27, 2024.

stock, market, technology