TORONTO — Strength in basic materials stocks helped lift Canada's main stock index to finish higher on Wednesday, while U.S. markets were mixed as investors took stock of valuations for mega-cap tech companies.
Theresa Shutt, chief investment officer at Harbourfront Wealth Management, said there has been “some retrenchment” of the mega-cap stocks in U.S. markets.
“I think there's now more uncertainty or skepticism around valuations. So we're seeing that take place,” she said.
U.S. stock indexes ended mixed on Wednesday after Nvidia, Palantir and other superstar stocks pared most of their steep losses from the morning.
“I don't know if we're going to see a full rotation into the broader index. I think we'll have to see, but there's definitely been some profit taking that's been taking place because I think maybe some investors are seeing this as kind of the top of the market,” Shutt said.
The S&P/TSX composite index was up 54.88 points at 27,878.76.
In New York, the Dow Jones industrial average was up 16.04 points at 44,938.31. The S&P 500 index was down 15.59 points at 6,395.78, while the Nasdaq composite was down 142.09 points at 21,172.86.
The day’s action again centred around stocks caught up in the mania around artificial intelligence technology.
These stocks are facing criticism that their prices shot too high, too fast and became too expensive.
“I think there's a bit more of a tepid sentiment about U.S. equities right now. I think there are some concerns about overvaluation amongst the tech sector,” Shutt said.
She added that the release of the latest minutes from the U.S. Federal Reserve on Wednesday added to this sentiment.
The minutes noted most officials said last month that the threat of higher inflation was a greater concern than the potential for job losses, leading the central bank to keep its key rate unchanged at the July 29-30 meeting.
Shutt also said Fed chair Jerome Powell’s upcoming speech, expected to be delivered at the Jackson Hole symposium on Friday, will be something closely watched by markets.
“I think Friday will be kind of the game-changer day ... and I think that will really influence the stock market going forward,” she said.
While U.S. markets are closely watching the Fed, Shutt said Canadian markets are closely watching the movement of equities south of the border.
“I feel like the Canadian market is just somewhat treading water and really taking its signs from the U.S. market. And I think a lot of the impacts on tariffs have been built into valuations in Canada,” she said.
“So I think any kind of future movements will be data dependent, and in particular, employment data, I think, will be a key factor that will impact the Canadian market going forward.”
The Canadian dollar traded for 72.12 cents US compared with 72.19 cents US on Tuesday.
The October crude oil contract was up 94 cents US at US$62.71 per barrel. The December gold contract was up US$29.80 at US$3,388.50 an ounce.
This report by The Canadian Press was first published Aug. 20, 2025.
— With files from The Associated Press
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Daniel Johnson, The Canadian Press
