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Futures Pull Back as Wall Street Awaits Key Economic Data

U.S. stock futures edged lower early Monday as investors paused to reassess the market’s momentum following the Dow Jones Industrial Average’s surge past the 50,000 mark last week. The milestone rally, driven by strong earnings and renewed optimism around economic resilience, has now given way to a more cautious tone. Futures tied to the Dow, S&P 500, and Nasdaq all slipped as traders looked ahead to a pivotal week of economic reports. Upcoming data on job growth and inflation is expected to shape expectations for the Federal Reserve’s next moves, especially as policymakers continue to balance cooling price pressures with signs of a still‑sturdy labor market. Despite the pullback, analysts note that the broader market remains on solid footing. Investors are watching closely to see whether this week’s numbers reinforce the narrative of a soft landing—or introduce new uncertainty into an otherwise powerful start to the year.
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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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