The TSX plunged 376 points today on weak investor sentiment, after the Bank of Canada boosted its interest rate for the fifth time since July 2017.
The Bank of Canada raised its interest rate by a quarter percent today, to bring its benchmark rate to 1.75 per cent, the highest in a decade.
According to the central bank, the Canadian economy continues to operate close to its potential, and expects growth to average about two per cent over the second half of 2018.
It also notes that inflation is projected to grow by 2.1 per cent this year and next before slowing to 1.9 per cent in 2020.
The rate decision sparked a 2.6 percent drop in the heavyweight financials sector as Canadian bank stocks tumbled.
In total, 10 of the TSX’s 11 sectors were deeply submerged in the red, led lower by substantial dips in the industrials and materials sectors.
The rate hike propelled the loonie, however, as the dollar strengthened 20/100ths of a cent to $0.7662 US.
In New York, the Dow was off by a whopping 608 points, despite a strong earnings report from industrial giant Boeing.
Uncertainty over a deluge of U.S. quarterly corporate results this week along with fears over rate hikes, a slowing global economy, and a sharp downturn in the tech sector soured investors’ confidence on Wall Street.
A decline in housing stocks also dragged the exchange lower. According to the U.S. Commerce Department, sales of new single-family homes fell to a two-year low in September.
The Nasdaq tumbled 329 points with broad based declines in tech stocks including Microsoft, Apple, Intel, and Netflix, which fell 9.4 percent.
Oil inched lower with U.S. sanctions on Iranian exports fast approaching, however a fifth weekly rise in domestic stockpiles limited losses.
Oil dropped 12 cents to $66.31 US a barrel while gold dropped $1.70 to $1,232 an ounce.