The S&P/TSX Composite closed up 0.51% at 35,801.09 on Monday, a gain of 181 points, after leading by 320 points at 11:39 a.m. Eastern. It gave back 43% of that morning gain as U.S. technology stocks reversed, even though WTI crude fell 7.4% to $96.46.
In New York the S&P 500 fell 0.51% to 7,541.40 and the Nasdaq Composite fell 1.07%, after the Nasdaq had been up as much as 1.4% earlier in the session, CNBC reported. The Dow Jones Industrial Average rose 0.41% to 51,983.98. The VIX gained 8.91% to 21.15, and the 10-year Treasury yield eased 3.5 basis points to 4.893%, according to CappNotes.
Why the Morning Gain Faded
The reversal came from AI-linked names. Marvell fell 12.72% to $171.41 after agreeing to buy Lumentum in an all-stock deal, and Lumentum fell 18.59%. Oracle fell 8.76% after announcing a $10-billion stock sale and a bond sale, and Apple gave a weak gross-margin forecast, CNBC reported.
It was the second session in three of AI valuation stress. On October 30 the TSX fell 629 points, or 1.74%, to 35,620.03 after Alphabet dropped more than 12% the previous day on heavier cash burn, BNN Bloomberg reported. Monday recovered 29% of that decline.
WTI posted its biggest daily loss since July 27 as the United States and Iran signalled openness to a diplomatic end to the war. Brent settled at $104.77, down 7.63%. Gold rose 1.49% to $3,956.90 an ounce and silver gained 3.21% to $50.68.
In the morning, Canadian Press credited base metal and industrial stocks for the TSX advance, and the Canadian dollar traded at 71.57 US cents, against 71.63 on Friday. As of the 11:39 a.m. report, December crude was down US$6.96 at US$97.16.
Where the Close Leaves the Index
The Composite closed 1.4% below its October 21 closing high of 36,324.99 and 1.84% above its October 1 close of 35,154.76. The 5-day average stands at 36,021.35, which puts the close about 0.6% below it.
Daily S&P/TSX Composite close with a 5-day average; the dashed green line marks the October 21 closing high of 36,324.99. The index led by 320 points at 11:39 a.m. Eastern on November 2 before closing 181 points higher; the October 30 decline was 629 points. Source: YCharts; Canadian Press.
The sessions ahead carry dated risks. The U.S. midterm vote is today, the federal budget follows on Thursday, November 5, and the Bank of Canada decides on December 9. Goldman Sachs raised its year-end Brent forecast to $105 from $90, citing the risk of escalation after the midterms, Euronews reported, which ties the next leg in Canadian equities to whether the oil premium rebuilds or fades.