Stock Market Today: Stocks Finish Mixed After Bank of Canada's Surprise Rate Hike
Canada's central bank unexpectedly lifted interest rates after pausing them earlier this year.
![exterior of Bank of Canada building in Calgaray, Alberta](https://cdn.mos.cms.futurecdn.net/kikVDAkdsVaMv4mVaE9tLh-415-80.jpg)
Stocks started Wednesday higher but retreated as the session wore on as a surprise rate hike from the Bank of Canada lifted expectations the Federal Reserve will hike interest rates at its upcoming meeting.
Not helping matters was a spike in Treasury yields, which had an outsized effect on tech stocks.
"The Bank of Canada is a leading central bank," says Edward Moya, senior market strategist at currency data provider OANDA, adding that they were the first among their global peers to raise interest rates in 2022 and the first to pause earlier this year.
![https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png](https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-320-80.png)
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Canada's central bank restarting its tightening cycle and signaling more rate hikes could come down the pike in order to tamp down stubbornly high inflation has many rethinking what the Fed will do, Moya says.
At last check, futures traders were pricing in a 31% chance for a quarter-point rate hike at the next Fed meeting, up from 22% yesterday and 26% one week ago. But even if the Fed pauses at its upcoming gathering, the probability for a 0.25% rate increase at the July meeting is over 50%, according to CME Group.
Treasury yields spike
Increasing expectations for higher interest rates lifted Treasury yields on both 2-year (+2.5 basis points to 4.55%) and 10-year (+9.3 basis points to 3.793%) notes. This, in turn, dragged on technology (-1.5%) and communication services stocks (-1.1%).
Not surprisingly, the tech-heavy Nasdaq Composite was the worst performer of the major indexes, shedding 1.3% to 13,104.
The S&P 500 (-0.4% at 4,267) also finished in the red, while the Dow Jones Industrial Average gained 0.3% to 33,665 on strength in industrial stock Caterpillar (CAT, +3.9%) and big bank Goldman Sachs Group (GS, +2.7%).
Nvidia a top stock pick of billionaire investors
Each quarter, we take a look at regulatory filings to see what the smart money is doing. We've uncovered the stocks Warren Buffett is buying and selling in the Berkshire Hathaway equity portfolio, as well as the best blue chip stocks that hedge funds bought in the first quarter.
Most recently, we took a deep dive to see what were some of the top stock picks of billionaire investors at the start of the year. Spoiler alert: they are some of the biggest and best tech stocks on Wall Street.
One particular standout was Nvidia (NVDA), which is a favorite of Philippe Laffont's Coatue Management. The hedge fund has owned NVDA since 2016 and upped its stake in the semiconductor stock by 7% in Q1, which followed a 37% increase in Q4. It's easy to see why the smart money is clamoring for a piece of Nvidia's pie. Not only has it more than doubled in value for the year-to-date, but it's been one of the best stocks of the past 30 years.
Related Content
- Kiplinger's Weekly Earnings Calendar
- SEC Sues Coinbase and Binance, World's Two Largest Cryptocurrency Exchanges
- When is the Next CPI Report?
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
Visa Is the Worst Dow Stock Wednesday. Here's Why
Visa stock is down sharply Wednesday after the credit card company came up short of revenue expectations for its fiscal Q3.
By Joey Solitro Published
-
Another Analyst Moves to the Sidelines on Tesla Stock After Earnings
Tesla stock is spiraling Wednesday after the EV maker's big earnings miss and Wall Street has been quick to weigh in. Here's what you need to know.
By Joey Solitro Published
-
Stock Market Today: Stocks Slip Ahead of Mega-Cap Earnings
GE Aerospace shares soared after earnings while United Parcel Service stock slumped.
By Karee Venema Published
-
Stock Market Today: Mega-Cap Tech Rallies to Drag Markets Higher
Markets focused on upcoming earnings from Magnificent 7 stocks rather than chaos in D.C.
By Dan Burrows Published
-
Stock Market Today: Stocks Tumble After Spectacular Global Internet Crash
Market participants rushed out of risk assets to end a wild week of trading.
By Dan Burrows Published
-
Stock Market Today: Dow Sinks 533 Points as Big Banks, Mega Caps Slump
Goldman Sachs and Apple were two of the worst-performing blue chip stocks on Thursday.
By Karee Venema Published
-
Stock Market Today: Semis Get Slammed and Blue Chips Bounce
The potential for more curbs on tech sales to China set off a rotation into blue chips.
By Dan Burrows Published
-
Stock Market Today: Dow Spikes 742 Points After UnitedHealth Earnings
The S&P 500 and Nasdaq also scored wins Tuesday albeit with much smaller gains than the blue chip Dow.
By Karee Venema Published
-
Stock Market Today: Dow Adds 210 Points as Apple, Goldman Hit New Highs
A big rally in blue chips and some dovish Fed speak boosted the equities market Monday.
By Karee Venema Published
-
Goldman Sachs Reports Q2 Earnings Beat, Dividend Hike
Goldman Sachs stock finished higher Monday after the big bank beat expectations for its second quarter and raised its dividend. Here's what you need to know.
By Joey Solitro Last updated