Canada’s main stock index dipped on Friday in choppy trading as investors evaluated domestic jobs data, which hit the expectations of the Bank of Canada cutting interest rates in March.

The S&P/TSX composite index was down 0.1% at 25,500.93.

The benchmark index was largely flat for the week, with U.S. tariff uncertainty and mixed earnings from major Canadian companies weighing on the overall market sentiment.

Canada’s unemployment rate unexpectedly fell and the economy posted another solid month of job gains, data showed, signaling that joblessness was starting to ease.

Following the release of the data, bets for a 25-basis-point rate cut by the Canadian central bank in March decreased to 54.7% from the earlier 72%.

“What’s a good sign for the economy is the private sector jobs are growing that also means potentially the Bank of Canada might not have to cut interest rates as much as expected,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.

“So, based on that, we’re seeing a little bit of a pullback today in the Canadian market.”

Meanwhile, U.S. job growth slowed more than expected in January, but a 4% unemployment rate probably gives the Federal Reserve cover to hold off cutting interest rates at least until June.

On the TSX, communication shares lost as much as 1.3%. BCE Inc was down 4.1%.

The healthcare sector slipped about 1%.

The fall came as shares of cannabis firm Canopy Growth sank 19.2% after posting a bigger third-quarter loss, triggering pot stocks Cronos Group and Tilray Brands to tumble more than 3% and 4%, respectively.

On the flip side, the energy sector was among the top winners on the index with a rise of 1%, boosted by higher crude prices.

U.S. stock indexes are drifting lower on Friday after a discouraging report suggested U.S. consumers are bracing for higher inflation over the next year.

The S&P 500 was 0.3% lower in morning trading, though it remains on track for a modest gain for the week. The Dow Jones Industrial Average was down 87 points, or 0.2%, and the Nasdaq composite was 0.7% lower.

The action was stronger in the bond market, where Treasury yields climbed after a report suggested sentiment is unexpectedly souring among U.S. consumers. The preliminary report from the University of Michigan said U.S. consumers are expecting inflation in the year ahead to hit 4.3%, the highest such reading since 2023.

Economists pointed to the possibility of tariffs on a wide range of products imported into the United States, which President Donald Trump has proposed and would ultimately push up prices for U.S. consumers.

The consumer-sentiment data followed a mixed report on the U.S. job market that arrived before the U.S. stock market opened. It showed hiring last month was less than half of December’s rate, but it also included encouraging nuggets for workers: The unemployment rate eased, and workers saw bigger gains in average wages than economists expected.

All the data, taken together, could keep the Federal Reserve on hold when it comes to interest rates. The Fed began cutting its main interest rate in September in order to relax the pressure on the economy and job market, but it warned at the end of the year that it may cut fewer times in 2025 than it earlier expected given worries about inflation staying stubbornly high.

Wall Street would almost always prefer lower interest rates because they can encourage investors to pay higher prices for stocks and other investments. The downside is they can give inflation more fuel.

For Scott Wren, senior global market strategist at Wells Fargo Investment Institute, the jobs report did nothing to change his forecast for the Fed to cut the federal funds rate just once in 2025. That’s a touch more conservative than many traders on Wall Street, who collectively see a nearly 50% chance that the Fed will cut at least twice, according to data from CME Group. Of course, some traders are also betting on the possibility for zero cuts.

Wren says financial markets could stay shaky in the near term, not only because of uncertainty about interest rates but also about Trump’s tariffs and other unknowns around the world.

After rocking financial markets around the world at the start of this week, worries about a potentially punishing global trade war have eased a bit after Trump gave 30-day reprieves for tariffs on both Mexico and Canada. But “Europe might be next, and even if the final outcome is benign, uncertainty could weigh on global investment,” Bank of America economists wrote in a BofA Global Research report.

In the meantime, stocks of big U.S. companies continue to swing as they report how much profit they made during the last three months of 2024.

Amazon, one of Wall Street’s most influential companies, topped analysts’ expectations for earnings at the end of 2024, but its stock nevertheless fell 3.8%. Investors focused instead on its forecast for upcoming revenue, which fell short of analysts’ expectations.

Expedia Group and video-game producer Take-Two Interactive Software helped offset that loss following their better-than-expected profit reports. Expedia jumped 15.7%, and Take-Two climbed 13.8i%.

In the bond market, the 10-year Treasury yield rose to 4.50% from 4.44% late Thursday. The two-year Treasury yield, which more closely tracks expectations for the Fed, rose to 4.28% from 4.22%.

A fear among economists is that when U.S. households expect inflation to be much higher in the future, they start buying things in advance and making other moves that can kick off a vicious, self-fulfilling cycle that worsens inflation.

In stock markets abroad, indexes fell modestly across Europe after the data on U.S. consumer sentiment was released, while they were mixed in Asia.

Reuters and The Associated Press