CANADA STOCKS-TSX pulls back from three-week high as financials, metal miners fall

By Reuters News

By Fergal Smith

- Canada's main stock index fell on Monday, weighed by declines for financial and metal mining shares, as investors worried that a potential Bank of Canada interest rate hike could slow the domestic economy.

The S&P/TSX Composite Index .GSPTSE ended down 247.92 points, or 0.7%, at 35,928.63, after posting its highest closing level in more than three weeks on Friday.

  • Canada's annual inflation rate rose less than expected to 3.1% in September.

  • Still, investors have raised their bets on a Bank of Canada interest rate hike next week after Governor Tiff Macklem said on Saturday there was increased risk that inflation broadens and becomes more persistent.

  • "If they were to hike, they're going to be slowing down an economy that's already moving at a snail's pace," said Allan Small, senior investment adviser at the Allan Small Financial Group with iA Private Wealth.

  • Canada's economy has lost 41,200 jobs in the first nine months of the year compared with a gain of 211,300 in the same period of 2025.

  • Heavily weighted financials .SPTTFS fell 0.6%, while industrials .GSPTTIN were down 1.1% as railroad shares and Air Canada AC.TO lost ground.

  • Shares of Air Canada fell 3.2% after brokerage Jefferies cut its rating on the stock.

  • Interest rate sensitive stocks were a drag, with real estate .GSPTTRE down 1.3% and utilities .GSPTTUT ending 1.4% lower.

  • Canada's 10-year yield climbed 12.4 basis points to 3.953%, moving back in reach of the nearly three-year high it touched earlier this month at 4.042%.

  • The materials sector .GSPTTMT, which includes metal mining shares, fell 1.1%. The price of gold was down 0.5%, pressured by a firm dollar and elevated US Treasury yields.

  • Energy .SPTTEN was the only major sector to end higher, adding 0.5%.

  • US crude oil futures settled up 2.2% at $103.66 a barrel after attacks by Yemen's Iran-aligned Houthis on a Yemeni military training camp and renewed attacks on Saudi energy, airport and military facilities.

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