Canada's main stock index retreated from a four-week high on Thursday, with the S&P/TSX Composite Index cratering 412.00 points, or 1.13%, to 35,912.99 as of 11:40 a.m. Toronto time on Thursday, October 22, 2026. According to The Canadian Press, this decline came after Wednesday's close of 36,324.99, which had been the TSX's highest since September 22. The pullback reflects broader market concerns about AI spending and commodity price movements, with the Canadian dollar edging up 0.05 cents to 71.26 cents U.S. December futures on the S&P/TSX index had been down 0.66% early in the morning, signaling weakness before the open.
Technology stocks led the decline, with the sector falling 1.6% amid renewed concerns over AI spending following Meta's quarterly results. As reported by Reuters, shares of electronic equipment company Celestica tumbled 10% to $385.45, contributing significantly to the technology sector's weakness. The global AI sell-off reached Toronto, with Meta Platforms' higher expense outlook and *Lam Research'*s disappointing guidance pushing the Nasdaq Composite down more than 2%. Canadian technology stocks, many of which are tied to AI hardware and data-centre demand, fell with their US peers. According to Brian Madden, chief investment officer at First Avenue Investment Counsel, the market is starting to get concerned about AI spending, with Celestica being very much linked to the AI trade due to its work for hyperscaler companies.
The materials sector, which includes metal mining shares, declined 5.3% to post its lowest closing level since August 4. According to The Canadian Press, metals were the clearest source of pressure, with the December gold contract falling US$77.80 to US$4,072.20 an ounce. Copper prices also slipped, which hit the mining stocks that make up a large share of the Canadian index. The Motley Fool Canada had warned before the open that falling gold and silver prices could weigh on the resource-heavy benchmark. The increase in oil prices fueled inflation concerns ahead of a Federal Reserve policy meeting next week, with US crude oil futures settling 2.4% higher at $99.47 a barrel, though energy stocks still lost 2.7% overall.
Safe-haven demand for government debt helped lower long-term borrowing costs, with Canada's 10-year yield down 7.9 basis points at 3.786%. As reported by Reuters, this decline in long-term interest rates provided some support to interest rate sensitive sectors, with the real estate sector adding 2.4% and industrials ending up 2.2%. The five laggards were weighed most by gold, off 5.4%, materials, retreating 5.3%, and energy, off 2.7%.
Within the industrials sector, Mullen Group rose $2.15, or 7.4%, to $31.10, after reporting quarterly results above estimates, helping drive the sector's performance. According to Reuters, the industrials sector climbed 2.2% despite broader market weakness. The strong quarterly results from Mullen Group, a logistics firm, provided positive momentum alongside other industrial companies. On the economic front, Statistics Canada revealed that its raw materials price index increased 4.8% in September, while Canada's new housing prices fell 0.2% month over month in September, after declining 0.1% in August.
