TORONTO — Strength in the basic materials sector helped Canada's main stock index close higher on Thursday, while U.S. markets lost ground amid a rotation away from large tech stocks.
“It's more of this trend, particularly this week we've seen more of it, you've seen money leaking out of the tech sector a little bit and going into the rest of the indices,” said John Zechner, chairman and lead equity manager at J. Zechner Associates.
He added that since tech stocks are highly represented on the S&P 500, that index is down overall, but most of the losses are coming from mega-cap tech companies, which are all large weights on the index. In contrast, Zechner said other areas of the market are doing better.
“Once in a while you get these rotations, and it doesn't take much of dollars leaking out of those big tech stocks at all to buoy up the rest of the indices,” he said.
In New York, Wall Street fell to a fifth straight loss on Thursday. The Dow Jones industrial average was down 152.81 points at 44,785.50. The S&P 500 index was down 25.61 points at 6,370.17, while the Nasdaq composite was down 72.54 points at 21,100.31.
“Most of the rest of the market is actually higher this week, but the big weights can drag it down so much. You get Nvidia, Amazon, Microsoft, all of those guys rolling over a little bit, and that's going to take the S&P 500 down, you're almost 40 per cent of the index right there,” Zechner said.
“That rotation is net negative for the S&P 500, but (if) you look at Toronto, the Canadian market, you look at the Russell in the U.S., some of the more broadly based indices, even the Dow is acting a little better.”
Zechner said that since the tech stocks have less of a presence on the TSX, Canada’s benchmark index fared better on the day.
The S&P/TSX composite index was up 176.67 points at 28,055.43.
“It's not as big an impact on the index here, and it's not nearly the weight in the U.S.," he said. "Gold is as big as the tech stocks here, and gold stocks are stronger today."
Elsewhere on the Canadian index, the nation's largest lenders are set to report earnings next week, which Zechner said will be closely watched.
“The bank valuations are pretty high, so everyone's waiting to see what the numbers look like. I don't expect there'll be big disappointment,” he said.
“Capital markets were strong in the past quarter, and the economy so far has not really been hurt that badly yet from this whole tariff story, but it has yet to be played out.”
The Canadian dollar traded for 71.96 cents US compared with 72.12 cents US on Wednesday.
The October crude oil contract was up 81 cents US at US$63.52 per barrel. The December gold contract was down US$6.90 at US$3,381.60 an ounce.
This report by The Canadian Press was first published Aug. 21, 2025.
— With files from The Associated Press
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Daniel Johnson, The Canadian Press
