Canada’s main stock index opened lower on Wednesday, dragged down by a technology sector rout on Wall Street, though gains in gold and oil shares helped limit overall market losses.

At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 80.55 points, or 0.35%, to 22,914.84 at open.

Wall Street tumbled at the open on Wednesday, with the Nasdaq slumping over 1% as declines in major chip and tech stocks led broad-based losses amid a bevy of corporate results and the prospect of fresh U.S. trade curbs on Chinese chips.

The Dow Jones Industrial Average fell 91.91 points, or 0.22%, at the open to 40,862.57.

The S&P 500 opened lower by 57.13 points, or 1.01%, at 5,610.07, while the Nasdaq Composite dropped 321.15 points, or 1.74%, to 18,188.19 at the opening bell.

A report that the Biden Administration was considering severe trade restrictions as part of a chip clampdown against China weighed on semiconductor stocks in premarket trading.

AI-chip favorite Nvidia tumbled 3.7%, while ASML’s U.S.-listing lost 9.2%.

In other moves, U.S.-listed shares of Taiwan Semiconductor Manufacturing shed 6.1% after Republican presidential candidate Donald Trump said Taiwan should pay the U.S. for its defense.

Marvell Technology, Broadcom, Qualcomm , Micron Technology, Advanced Micro Devices and Arm Holdings were also down.

All the so-called “Magnificent Seven” megacap stocks slumped, with Apple, Microsoft Meta Platforms and Tesla down between 1% and 2.1%.

The possibility of a fresh crackdown on China trade could be the negative trigger investors were waiting for to start booking profits in tech stocks, according to Ahmed Azzar, financial market analyst at Equiti Group.

Signaling growing investor unease, Wall Street’s “fear gauge” was trading at its highest level in six weeks.

The Dow Jones Industrial Average and the S&P 500 had closed at all-time highs on Tuesday.

After a blistering rally in tech companies since the last leg of 2023, investors have begun moving out of expensive megacaps to underperforming areas of the market.

“I’m still optimistic that the market is not as expensive as maybe it’s feared, but that’s because we’re so overbought that some near-term selling pressure is likely to develop,” said Robert Pavlik, senior portfolio manager at Dakota Wealth, adding that he had also taken some profits in tech.

Firmer bets on a Fed rate cut in September as well as rising expectations that former President Donald Trump will be back in the White House in November following the attempt on his life have helped lift stocks in the last few sessions.

Investors will focus on comments from Fed officials Thomas Barkin and Christopher Waller later in the day for clues on how policymakers have assessed recent economic data.

The New York Fed’s John Williams said in an interview that the central bank was “getting closer” to a point where it could start cutting interest rates.

Markets in Taiwan were rattled by comments by former President Donald Trump to Bloomberg criticizing the self-governed island claimed by Beijing, which the U.S. is obligated by treaty to defense if it is attacked.

“Taiwan should pay us for defense,” Trump said according to a transcript of an interview published by Bloomberg. “Taiwan took our chip business from us, I mean, how stupid are we?” he said.

In Europe at midday, London’s FTSE 100 was flat as data showed the inflation rate remained steady at the Bank of England’s 2% target in June. That hit hopes for a central bank rate cut, though the better-than-expected data pushed the British pound above $1.30 early Wednesday.

Germany’s DAX and the CAC 40 in Paris each declined 0.4%.

In currency dealings, the U.S. dollar fell to 156.51 Japanese yen from 158.34 yen on Wednesday. It had traded last week near 162 yen but the yen rallied sharply on Friday. Reports said the Finance Ministry might have intervened in the currency market Wednesday and that it had stepped in last week, buying nearly 6 trillion yen ($37 billion) to support the yen.

Elsewhere in Asia, Australia’s S&P/ASX 200 advanced 0.7% to 8,057.90 after hitting an all-time high of 8,083.70 during morning trading. South Korea’s Kospi shed 0.8% to 2,843.29.

Hong Kong’s Hang Seng gained 0.1% to 17,739.41, while the Shanghai Composite index lost 0.5% to 2,962.85.

Traders are awaiting the outcome of a top level policy-setting meeting of the ruling Communist Party, which wraps up on Thursday. The closed-door gathering in Beijing is expected to endorse leader Xi Jinping’s vision for investing heavily in strengthening China’s self-sufficiency in advanced technologies.

In other dealings, U.S. benchmark crude oil added 72 cents to $81.46 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the international standard, picked up 50 cents to $84.23 per barrel.

The euro rose to $1.0943 from $1.0897.

In the U.S. on Tuesday, a report showed sales at retailers held firm last month despite economists’ expectations for a decline.

Still, many market players believe inflation is slowing enough to convince the Federal Reserve to begin cutting interest rates soon. The Fed has been keeping its main interest rate at the highest level in more than two decades in hopes of slowing the economy just enough to get inflation fully under control.

On Tuesday, the S&P 500 climbed 0.6% to 5,667.20, setting an all-time high for the 38th time this year. The Dow Jones Industrial Average leaped 1.9% to 40,954.48, and the Nasdaq composite lagged with a gain of 0.2% to 18,509.34, as the stars dimmed for some of the year’s biggest winners.

Reuters and The Associated Press

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