The Canadian stock market traded on a weak note on Wednesday even though the U.S. Federal Reserve announced its decision to slash interest rates by 50 basis points in a bid to cushion the economy. Despite this aggressive rate cut, the S&P/TSX Composite Index fell by 85 points, or 0.4%, to 23,593, as markets seemingly remained concerned about persistent inflation and a potential economic slowdown.
Although healthcare stocks posted solid gains, the TSX benchmark was dragged down by weakness in other major sectors, including mining, industrials, and utilities.
In its latest statement, the U.S. central bank highlighted the need to balance risks to employment and inflation as the economic outlook remains uncertain, with job gains slowing while inflation remains elevated. The Fed’s latest economic projections show GDP (gross domestic product) growth at 2% for 2024, with the federal funds rate expected to end 2024 at 4.4%.
