TORONTO – Canada’s main stock index edged lower on weakness in the technology sector as falling AI stocks dragged U.S. markets lower.
Friday’s trading session came ahead of a key inflation report from Statistics Canada on Monday.
“The Canadian economy has grown decently and inflation here in Canada on the core side has actually been close to the Bank of Canada’s target around two per cent,” said Steve Locke, chief investment officer for fixed income and multi-asset strategies at Mackenzie Investments.
“The inflation story is not quite as hard to manage here for the Bank of Canada.”
A Reuters poll of economists expects inflation cooled to 2.9 per cent in June from a recent high of 3.2 per cent in May, according to LSEG Data & Analytics.
Gas prices fell in June, which is expected to pull the annual inflation rate back below three per cent. However, it remains to be seen how higher oil prices from a resumption of hostilities in the Middle East will affect July’s inflation figures.
The S&P/TSX composite index was down 76.30 points at 35,263.85. The technology sector was the biggest weight on the TSX.
“The ebb and flow around the AI cycle, the technology cycle and what we’re seeing globally has had an impact here in North American stocks. That’s fed through a little bit into the technology numbers you’re seeing today here in Canada,” Locke said.
He added that it amounted to minor volatility.
The United States expanded its airstrike campaign against Iran early Friday by hitting more bridges and collapsing a tower at a key Iranian port. That raised further worries about whether oil tankers will be able to use the Strait of Hormuz to carry crude from the Persian Gulf to customers worldwide.
As a result, rising oil prices lifted the TSX energy sector.
“With the unfortunate conflict continuing in the Middle East, we see an impact on energy prices when shots are being fired again between Iran and the U.S.,” Locke said.
“The upside is that we do get a benefit to some of our energy stocks, but we obviously don’t like to see the conflict continuing.”
The September crude oil contract for North American benchmark West Texas Intermediate was up US$3.50 at US$81.78 per barrel. The price for a barrel of Brent crude, the international standard, jumped 4.6 per cent to settle at US$88.10, up from roughly US$76 a week ago.
In New York, the Dow Jones industrial average was down 406.55 points at 52,146.42. The S&P 500 index was down 76.08 points at 7,457.69, while the Nasdaq composite was down 361.70 points at 25,520.24.
Chip stocks and other AI darlings once again were at the centre of the shaky trading.
They’ve been under pressure for weeks on worries that their prices shot too high and that voracious demand for computer memory and processors may be unsustainable if AI ends up producing less profit and productivity than promised.
Nvidia was the heaviest weight on the S&P 500 after dropping 2.2 per cent. Its recent losses forced it to briefly cede the No. 1 ranking as the most valuable company on Wall Street Friday, but it finished the day back above Apple.
Adding to the pressure on Wall Street were drops for several stocks after their latest earnings reports. Companies are under pressure to deliver big growth to justify the big moves upward their stock prices have already made.
Netflix sank 7.3 per cent after its revenue for the latest quarter fell just short of analysts’ expectations, even though its profit was bigger than expected. Its forecasts for upcoming revenue and profit in the summer also came in below expectations.
The Canadian dollar traded for 71.36 cents US compared with 71.24 cents US on Thursday.
The August gold contract was up US$26.70 at US$4,018.80 an ounce.
This report by The Canadian Press was first published July 17, 2026.
— With files from The Associated Press
Companies in this story: (TSX: GSPTSE, TSX: CADUSD)
