TORONTO – Canada’s main stock index finished lower on Tuesday, weighed down by broad-based losses, while U.S. markets also lost ground the day before key interest rate decisions on both sides of the border.
John Bai, chief investment officer at Aviso Wealth, said Tuesday’s trading day was “quiet” ahead of interest rate announcements from the U.S. Federal Reserve and Bank of Canada on Wednesday.
The S&P/TSX composite index was down 115.79 points at 29,315.23.
In New York, the Dow Jones industrial average was down 125.55 points at 45,757.90. The S&P 500 index was down 8.52 points at 6,606.796 while the Nasdaq composite was down 14.79 points at 22,333.96.
He said he doesn’t anticipate any surprises from either the Bank of Canada or the Fed, and that markets will be watching to see what central bankers say about the decisions.
“For Canada, you will be looking for comments around the resilience around the Canadian economy,” Bai said.
He highlighted that Canada’s economy has been relatively resilient on a year-to-date basis despite trade uncertainty, due largely to the Canada-United States-Mexico Agreement (CUSMA). However, Bai said recent economic data, including GDP and employment figures, show that the trend may not continue.
“These are all signs that resilience is fading, and we do want to see how the Bank of Canada is thinking about that,” he said.
Meanwhile, most economists believe the Bank of Canada has a green light to cut interest rates on Wednesday after a last-minute inflation report showed price pressures were relatively tame in August.
Annual inflation rose to 1.9 per cent last month, Statistics Canada said Tuesday. That’s up from 1.7 per cent in July but short of economists’ expectations for two per cent inflation heading into the release.
“The inflation data that we got today confirms that there’s nothing on the inflation front that will stand in the way of a 25 basis point cut tomorrow,” Bai said.
The upcoming Fed meeting is taking place with both a new Trump administration appointee and an official the White House has targeted for removal.
Stephen Miran, a top White House economist who was confirmed by the U.S. Senate with unusual speed late Monday, was sworn in Tuesday as a member of the Federal Reserve’s board of governors.
He will vote on the Fed’s interest rate decision on Wednesday, when the central bank is expected to reduce its key rate by a quarter-point. Miran may dissent in favour of a larger cut.
Also attending the meeting is Fed governor Lisa Cook, whom the Trump administration has sought to fire in an unprecedented attempt to reshape the Fed, which historically is considered independent of day-to-day politics.
“I’ve been following the Fed for a long time. This is the first time where we went into a meeting not knowing exactly who will be voting in the meeting ahead,” Bai said.
“It will be interesting to see. Right now, the markets are pricing in two rate cuts to the end of the year. We’ll be seeing in … if the addition of Stephen Miran and additional information that they’ve received, whether or not they’re expecting three rate cuts to the end of the year rather than two.”
The Canadian dollar traded for 72.74 cents US compared with 72.44 cents US on Monday.
The October crude oil contract was up US$1.22 at US$64.52 per barrel. The December gold contract was up US$6.10 at US$3,725.10 an ounce.
This report by The Canadian Press was first published Sep. 16, 2025.
— With files from Craig Lord and The Associated Press.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
