Tech stocks weigh on Canadian, U.S. markets while pot stocks surge

TORONTO – Stock markets finished lower on Friday, weighed down by large technology firms and AI-related concerns.

Kevin Burkett, portfolio manager at Victoria-based Burkett Asset Management, said that Canada’s tech sector faced a bit of a spillover effect from U.S. stock markets, where tech stocks drove Wall Street lower.

Within Canada’s tech sector, he said Celestica Inc. was impacted by some of the “AI skepticism.” Celestica shares finished 12.92 per cent lower on the day, taking the most points off the index.

Meanwhile, shares in Canada’s cannabis companies surged after reports that U.S. President Donald Trump is planning to ease federal restrictions on the drug.

Shares of Tilray Brands Inc. gained 44.35 per cent, while Canopy Growth Corp. shares were up 52.87 per cent. Aurora Cannabis Inc. shares were up 19.04 per cent and Organigram Global Inc. was up 16.81 per cent.

Burkett said that while cannabis stocks in Canada “had all but died,” more aggressive legalization in the United States could bring the group of stocks back to life.

“Does something like this bring them back to life? Maybe, but (it) remains quite remote in terms of possibility; they’re up a lot but off a low base,” he said.

Meanwhile, investors in Canada are gearing up for November inflation data from Statistics Canada on Monday. A Reuters poll on Friday showed the consensus among economists is that headline inflation for November will come in at 2.3 per cent, according to LSEG Data & Analytics.

Burkett noted the data will give clues to the health of the Canadian economy and whether inflation is under control with a Bank of Canada policy rate at 2.25 per cent.

The S&P/TSX composite index was down 133.34 points at 31,527.39.

Broadcom dragged the U.S. market lower and tumbled 11.4 per cent even though the chip company reported a stronger profit for the latest quarter than analysts had expected. Broadcom’s drop added to worries about the AI boom that flared a day before. That’s when Oracle plunged nearly 11 per cent despite likewise reporting a bigger profit for the latest quarter than analysts expected.

Broadcom was the heaviest weight on the S&P 500 Friday, followed by Nvidia. The chip company that’s become the poster child of the AI boom fell 3.3 per cent. Oracle fell another 4.5 per cent.

Burkett said Oracle’s results came as “something of a disappointment” and stoked fears among AI naysayers regarding concerns around runaway valuations and expectations.

In New York, the Dow Jones industrial average was down 245.96 points at 48,458.05. The S&P 500 index was down 73.59 points at 6,827.41, while the Nasdaq composite was down 398.69 points at 23,195.17.

The Canadian dollar traded for 72.63 cents US compared with 72.60 cents US on Thursday.

The January crude oil contract was down 16 cents US at US$57.44 per barrel. The February gold contract was up US$15.30 at US$4,328.30 an ounce.