Bay Street Likely To Open Lower

(RTTNews) - Canadian shares are likely to open on a slightly negative note Wednesday morning as energy and materials sectors may find the going somewhat tough due to weak commodity prices.

Uncertainty about the outlook for U.S. interest rates is likely to weigh on sentiment and prevent investors from making significant moves.

The minutes from the Federal Reserve's recent policy meeting, due later in the day, may provide some clues about the central bank's interest rate trajectory.

The Canadian market recorded a fresh closing high on Tuesday, edging up slightly after stocks moved in a tight range. Data showing a slowdown in consumer price inflation raised hopes the central bank will soon start reducing interest rates.

The benchmark S&P/TSX Composite Index, which rose to 22,554.98 in early trades, soon pared most its gains, and then moved in a very narrow range before finally settling at 22,416.01, up 2.79 points or 0.01% from the previous close.

Data from Statistics Canada said the annual inflation rate in Canada eased to 2.7% in April from 2.9% in the earlier month, marking the softest rate of consumer price growth since March 2021.

The reading was consistent with BoC expectations that inflation should remain near 3% in the first half falling below 2.5% in the second half of the year, maintaining the signal that rate cuts are "getting closer".

Consumer prices in Canada rose by 0.5% from the prior month in April of 2024, slowing slightly from the 0.6% increase in March. Annual core inflation rate in Canada slowed to 1.6% in April of 2024, the lowest level in three years and from 2% in March.

Asian stocks ended mixed in range-bound trade on Wednesday as investors waited for cues from AI chip leader Nvidia's earnings and the release of minutes of the Federal Reserve's recent meeting.

Waning optimism over Chinese economic recovery and geopolitical uncertainties also kept investors on the sidelines.

European stocks are lower, weighed down by data showing a bigger than expected increase in U.K.'s consumer price inflation in the month of April. Data showed UK inflation came in at 2.3% on an annual basis, above the forecast of 2.1%. However, it stayed closer to the Bank of England's 2% target, than March's reading of 3.2%.

In commodities, West Texas Intermediate Crude oil futures are down $0.59 or 0.76% at $78.07 a barrel.

Gold futures are down $12.00 or 0.49% at $2,413.90 an ounce, while Silver futures are lower by $0.148 or 0.46% at $31.930 an ounce.