Risk-off moves drive equity markets lower, led by declines in technology stocks

TORONTO – Canada’s main stock index finished nearly 500 points lower on Tuesday while U.S. markets also fell as investors moved away from riskier assets and awaited to see what would be included in Canada’s latest federal budget. 

Ryan Crowther, portfolio manager at Franklin Templeton’s ClearBridge Investments, said the trading session was a risk-off day, leaving investors with virtually “nowhere to hide across various sectors.”

He noted declines in equity markets came amid a technology-oriented sell-off that spilled over into Canada’s benchmark index.

Leading the losses was the technology sector, which was weighed down by Shopify Inc.

Shares of the Ottawa-based e-commerce firm fell 6.47 per cent despite reporting a blockbuster third quarter with a profit of US$264 million and 32 per cent jump in revenue compared with a year ago.

“There didn’t look to be anything in Shopify’s earnings that would be concerning from a company-specific standpoint, so it’s really just a rougher backdrop for them to have reported into,” Crowther said. 

The S&P/TSX composite index was down 497.24 points at 29,777.82.   

On Tuesday, the federal government unveiled its budget — the Liberals’ first fiscal update in almost a year and the first summary of Prime Minister Mark Carney’s agenda since the party released its spring election platform.

“It’s something where investors are certainly hopeful that we’re going to get something positive out of the budget in terms of some encouraging news around investment broadly, things that could help various sectors from a Canadian perspective,” Crowther said ahead of the budget announcement. 

Meanwhile, losses in U.S. stocks were spread broadly throughout every sector, but technology stocks were the heaviest weights. Palantir Technologies, which had more than doubled so far this year, fell eight per cent despite reporting results that beat analysts’ forecasts. Nvidia also reversed course from a day earlier, falling four per cent, while Microsoft fell 0.5 per cent.  

“At the open, Palantir was selling off and throughout the day we saw weakening quotes for the technology names,” Crowther said.  

The technology sector is typically the driving force behind the market’s broader movement, including its record-setting year. Huge values for companies, including Nvidia and Microsoft, give them outsized influence over the broader market’s direction. 

In New York, the Dow Jones industrial average was down 251.44 points at 47,085.24. The S&P 500 index was down 80.42 points at 6,771.55, while the Nasdaq composite was down 486.09 points at 23,348.64.

As large tech companies fell, Crowther said there is room for a “little bit of compression in valuations in the space.”

“You’ve still got pretty lofty valuations for a lot of these companies, so to have them sell off for a day, that’s just part of the game if you’re buying into more thematic investing like AI and more growth-oriented stocks,” he said. 

The Canadian dollar traded for 70.97 cents US, compared with 71.14 cents US on Monday.  

The December crude oil contract was down 49 cents US at US$60.56 per barrel. The December gold contract was down US$53.50 at US$3,960.50 an ounce.

This report by The Canadian Press was first published Nov. 4, 2025.

— With files from The Associated Press.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)