TSX Down 1.3% As Middle East Tensions, Rate Hike Fears Trigger Sell-off

(RTTNews) - Canadian stocks tumbled on Friday as stronger-than-expected Canadian and U.S. jobs data raised concerns the Bank of Canada and the Federal Reserve will hold interest rates at elevated levels for a longer duration.

Concerns about tensions in the Middle East and reports that Hezbollah has rejected a new ceasefire agreement with Israel weighed as well on sentiment.

The benchmark S&P/TSX Composite Index, which fell to 34,687.47, was down 464.61 points or 1.32% at 34,752.45 a little while ago.

Data from Statistics Canada showed employment in Canada rose by 88,000 in May, a 0.4% increase from April, the highest since December 2024. The economy had lost 112,000 jobs during the first four months of the year.

Meanwhile, the unemployment rate in Canada fell to 6.6% in May from 6.9% in the previous month, the lowest since January. The unemployment rate was expected to remain at 6.9%.

In the U.S., data from the Labor Department said non-farm payroll employment shot up by 172,000 jobs in May after surging by an upwardly revised 179,000 jobs in April. Economists had expected employment to climb by 85,000 jobs compared to the addition of 115,000 jobs originally reported for the previous month.

Materials stocks are the worst hit in the sell-off. The Materials Capped Index tumbled nearly 5%. Avino Silver & Gold Mines, Americas Gold & Silver Corporation, Vizsla Silver Corp., Endeavour Silver Corp, First Majestic Silver Corp., Ero Copper, Ngex Minerals, Hudbay Minerals, First Quantum Minerals, Ssr Mining and B2Gold Corp fell 6%-10%.

Energy stocks fell, pushing the Energy Capped Index down by about 1.9%. Terravest Industries down 26%, was the biggest loser. International Petroleum Corporation, Advantage Energy, Tamarack Valley Energy, Enerflex, Birchcliff Energy and Ces Energy Solutions lost 2.7%-3.4%.

The Information Technology Capped Index dropped nearly 2.5%. Celestica slid 5.5%, Firan Technologies lost 3%, Shopify drifted down 3.2% and BlackBerry shed 3.1%, while Descartes Systems Group, Docebo and Open Text Corporation lost 2%-2.5%.

Healthcare stock Curaleaf Holdings soared over 200% following the company doing a 1-for-3 reverse stock split today.

Consumer staples stocks Metro Inc., Weston George, The North West Company, Loblaw, Alimentation Couche-Tard and Empire Company gained 1.3%-2.5%.