Global political uncertainty and disappointing earnings out of the U.S. weighed on North American stocks Tuesday, pushing the Toronto and New York markets into the red.
The S&P/TSX composite index lost 62.32 points to close at 15,622.57, led by the base metals sector, which was down 1.38%. Energy stocks gave back 0.91% and the health-care sector of the TSX slipped 0.69%.
South of the border, the Dow Jones industrial average fell 113.64 points to 20,523.28, the S&P 500 index shed 6.82 points to 2,342.19, and the Nasdaq composite index dropped 7.32 points to 5,849.47.
The Canadian dollar closed at US74.73¢, down 0.37 of a cent from Monday.
Ben Jang, a portfolio manager at Nicola Wealth Management, says market volatility is rising due to global political uncertainty. That includes British Prime Minister Theresa May’s call for an early election for June 8, as well as the seemingly tight race in the upcoming French elections, said Jang.
“Obviously there was a little bit of a surprise from the U.K. front, but I don’t think the market is really considering that,” said Jang.
“I think the impact is really from the French elections coming up. I think that’s what the market is really focusing on.”
Jang said the VIX — the ticker symbol for the CBOE Volatility Index, a popular measure that is sometimes referred to as the fear index — is showing an increase in volatility “across the board.”
“When you look at how the polls are positioned and all four leading candidates are around that 20% mark, and how there’s a significant number of undecided voters, I think there’s a lot of uncertainty around the election that has people concerned,” said Jang.
Another factor confronting traders were corporate earnings from a couple of U.S. behemoths that were disappointing, he added.
“There’s been a few large bellwether companies that have reported and it’s been weak,” said Jang.
Shares of Johnson & Johnson were down $3.90, or 3.10%, to US$121.82 after the company reported a drop in sales, while Goldman Sachs Group Inc. lost $10.67, or 4.72%, to US$215.59.
In commodities news, the May crude oil contract lost US24¢ to US$52.41 per barrel, while the more heavily traded June crude contract declined US26¢ at US$52.85 per barrel.
The May natural gas contract was down US2¢ at US$3.15 per mmBTU, while the June gold contract rose US$2.20 at US$1,294.10 an ounce. The May copper contract dipped US7¢ at US$2.53 a pound.