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Tech Jitters and Fed Uncertainty Weigh on Markets

U.S. stocks slipped as a pivotal week began, with investors bracing for a wave of Big Tech earnings and the Federal Reserve’s upcoming policy decision. The Dow, S&P 500, and Nasdaq all edged lower, reflecting a cautious mood across markets. The pullback follows a choppy stretch for equities, as major indexes have struggled to regain momentum amid shifting expectations for interest‑rate cuts and ongoing geopolitical concerns. Tech stocks, in particular, have been under pressure after consecutive weekly declines, raising the stakes for earnings reports from industry giants. Apple, Microsoft, Meta, and Tesla are all set to report in the coming days, and their results could determine whether the sector reclaims leadership or continues to drag on broader market performance. With the Fed meeting approaching, traders are looking for clarity on the central bank’s rate‑cut timeline. Until then, many appear content to stay on the sidelines as uncertainty hangs over the week ahead.
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TSX Tumbles as Rate Hike Fears Loom

The Toronto Stock Exchange (TSX) closed at its lowest level in two weeks on Friday, as investors worried about the possibility of higher interest rates in the near future. The benchmark S&P/TSX Composite Index dropped 0.8% to 20,490.36 points, its worst performance since October 6.

The main factor behind the sell-off was the uncertainty over the timing and pace of monetary policy tightening by the Bank of Canada (BoC) and the U.S. Federal Reserve. Both central banks have signaled that they are ready to start reducing their massive bond-buying programs, which have supported the economic recovery from the pandemic.

However, the exact timing and magnitude of the tapering remain unclear, as the central banks balance the risks of inflation and growth. The BoC is expected to announce its decision on October 27, while the Fed will meet on November 2-3.

The prospect of less stimulus and higher borrowing costs weighed on the sentiment of investors, who sold off sectors that are sensitive to interest rates, such as financials, utilities and real estate. The energy sector also declined, despite a rise in oil prices, as some profit-taking took place after a strong rally in recent weeks.

On the positive side, some sectors that benefit from higher interest rates, such as materials and industrials, managed to post gains. The technology sector also outperformed, as some investors sought refuge in growth stocks.

The TSX was also influenced by the corporate earnings season, which kicked off this week. Some of the notable results included Shopify, which beat analysts' expectations and raised its full-year outlook; Rogers Communications, which missed estimates and lowered its guidance; and Canadian National Railway, which reported a mixed quarter and faced a strike threat from its workers.

The TSX is still up 16% year-to-date, but it has lagged behind its U.S. peers, which have reached record highs this month. The S&P 500 and the Nasdaq Composite both gained 0.2% on Friday, while the Dow Jones Industrial Average slipped 0.1%.



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