🇨🇦 Canada: TSX Falls Below 35,000
The S&P/TSX Composite Index lost ground for the second consecutive session Tuesday, falling 0.2% to close at 34,927 — a retreat below the closely watched 35,000 mark. The selloff was broad-based, with technology and mining stocks bearing the heaviest losses while banks held relatively stable.
Celestica was the standout decliner in the tech space, tumbling 6.2% as the global sentiment shift away from AI-linked infrastructure names hit Canadian equities hard. Concerns that speculative AI spending by major hyperscalers may be running ahead of actual returns weighed heavily on investor risk appetite.
Precious metals miners also struggled as gold prices pulled back. The slide in commodities broadly — including oil hitting a near three-month low — added pressure to Canada's resource-heavy index. Canadian banking stocks offered some cushion, remaining relatively stable amid ongoing credit expansion expectations following the banking regulator's decision earlier this week to lower capital requirements for major lenders.
Looking ahead to Wednesday's TSX session, early signals suggest continued turbulence. Markets are watching U.S. futures, Micron's after-market earnings report, and any fresh developments in U.S.–Iran diplomacy that could move oil prices — all of which directly affect Canadian equities.
🇺🇸 United States: Chip Wreck Drags Nasdaq to Worst Day in Weeks
Wall Street endured a punishing session Tuesday as a global semiconductor rout swept through U.S. markets. The Nasdaq Composite sank 2.21% to 25,587 and the S&P 500 dropped 1.44% to 7,365, while the blue-chip Dow Jones eked out a near-flat close at 51,667, down just 0.09%, propped up by defensive names in healthcare and consumer staples.
Memory chips led the carnage. Micron (MU) plunged 13%, Sandisk shed 11%, and Micron rival SK Hynix fell over 12% in Asia before the rout crossed the Atlantic. Nvidia lost 4.2%, AMD dropped 5.8%, and Qualcomm fell 8%. The selling was fueled by a combination of stretched valuations in AI infrastructure stocks and a hawkish note from Bank of America suggesting the Federal Reserve could deliver up to three rate hikes before year-end — a scenario that rattled a market that had been pricing in cuts.
Not all was negative. IBM surged 5% after a JPMorgan upgrade to overweight. Walmart, Procter & Gamble, and Johnson & Johnson all gained as investors rotated into defensives. The 10-year U.S. Treasury yield climbed to 4.499%, near multi-month highs, adding to pressure on growth and rate-sensitive stocks.
On Wednesday (today), U.S. futures are pointing slightly higher — S&P 500 futures up 0.1%, Nasdaq 100 futures up 0.4% — as markets brace for Micron's fiscal Q3 earnings after the close. Analysts expect revenue of $35.75 billion and EPS of $20.83. Also on deck: Federal Reserve bank stress test results and May new home sales data. Additionally, Alphabet (Google) will join the 30-stock Dow Jones when markets open next Monday.
🌏 Asia: South Korea's KOSPI Crashes 10%; Partial Recovery Wednesday
Asian markets bore the sharpest pain from Tuesday's tech-driven selloff. South Korea's KOSPI plummeted 9.99% — its steepest single-day drop in more than three months — as overseas investors rapidly exited chip and memory stocks on concerns the sector's powerful rally had become overextended. SK Hynix and Samsung Electronics both fell more than 12%, dragging the index down with them.
China's large-cap ETF fell roughly 2% and touched a new 52-week low. The iShares MSCI Taiwan ETF dropped about 5%, weighed down by Taiwan Semiconductor Manufacturing (TSM), which fell 5.2%. Hong Kong equities also declined, though losses there were comparatively more modest.
Wednesday brought partial relief: South Korea's KOSPI rebounded 3.3%, limiting the damage as investors assessed whether Tuesday's selloff was overdone ahead of Micron's earnings. Broader Asian benchmarks showed modest stabilization, though confidence remains fragile.
🇪🇺 Europe: Stoxx 600 Falls 1%; Tech Leads Losses
European markets were swept up in the global tech selloff Tuesday, with the pan-European Stoxx 600 shedding approximately 1%, pulling back from earlier steeper losses by the afternoon session. The Stoxx 600 Technology index fell 3%, with chipmaker STMicroelectronics and Dutch semiconductor equipment maker ASMI each falling more than 7% — among the biggest downward movers on the index.
Germany's DAX fell 0.98% and France's CAC 40 dipped 0.71%. By Wednesday, Europe's Stoxx 600 barely moved at the open as investors waited for Micron's earnings to set the next direction for global chip and tech stocks.
🛒 Oil & Commodities: Prices Keep Falling as Iran Deal Hopes Build
Crude oil continued its slide Wednesday. WTI crude fell 1.6% to $72.06 per barrel and Brent dropped 1.6% to $75.86 — near three-month lows — as investors absorbed ongoing signs of diplomatic progress in U.S.–Iran peace negotiations. Washington has granted Iran a 60-day license to sell oil on international markets, raising expectations of faster supply recovery. Traffic through the Strait of Hormuz is picking up, with Kuwait and the UAE using alternative export routes, and Iran having shipped more than 30 million barrels in the past week alone.
President Trump added to the energy story Wednesday, announcing he has instructed the Department of Justice to investigate major oil companies for alleged "gouging" at the pump — arguing that lower crude costs are not being passed on to consumers at the gas station. The move adds policy uncertainty to an already volatile energy market.
Gold futures fell 1.62% to $4,082.20 per ounce, while silver dropped 1.65% to $61.49 per ounce, as the risk-off mood paradoxically pressured precious metals alongside equities — a sign of broad de-risking rather than a classic flight to safety. For Canadian investors, continued weakness in gold and oil represents a dual headwind for the resource-heavy TSX.
What to Watch Today
- Micron (MU) Q3 Earnings (after close): The most important market event of the week — a beat and strong guidance could reverse the chip selloff; a miss could deepen it.
- Fed Bank Stress Test Results: Banks that pass may announce dividend hikes or buybacks — a potential catalyst for Canadian bank stocks too.
- U.S. May New Home Sales: Housing data will give clues on how higher interest rates are affecting real estate demand.
- Oil & Iran Talks: Any further progress — or breakdown — in U.S.–Iran negotiations will directly move crude prices and TSX energy stocks.
- CAD / USD: The loonie has been under pressure with the Canadian dollar near seven-month lows — watch for further moves as commodity prices and rate expectations shift.
- Alphabet Joins the Dow: Google's parent will enter the Dow Jones Industrial Average next Monday, a symbolic milestone for Big Tech's established status.
Bottom Line for Canadian Investors: The tech-driven global selloff is a reminder of how quickly sentiment can shift — especially in AI-linked names that had run far and fast. With Canada's May inflation still sitting at 3.2% and the Bank of Canada on hold, domestic investors face a trifecta of pressures: falling commodity prices, a weakening loonie, and a global risk-off wave. Tonight's Micron earnings could be the turning point that either restores confidence in the AI trade or deepens the selloff heading into month-end.
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