TORONTO — Canada’s main stock index fell more than 600 points Friday as markets worry the frenzy around tech stocks has sent prices too high.
“For the Canadian stock market, we are borrowing the move from the U.S. stock market. It’s as simple as that,” said Sébastien Mc Mahon, chief economist at iA Financial Group.
The S&P/TSX composite index was down 629.00 points at 35,620.03.
Worries are rising about whether all those hundreds of billions of dollars spent on AI will produce enough profit and productivity to make the investment worth it.
“The theme has become speculative. It’s not a bubble; we’re not that worried about valuations yet, but the market is looking for solid signals or solid information,” Mc Mahon said.
“When we have the Anthropic IPO behind us, then we’ll have solid audited and regular information about AI adoption, but the market seems to be blindsided now by the news like we’ve had from Google and from Amazon and from Intel.”
Anthropic filed paperwork Monday for its IPO, setting it up for a potential debut next month.
Amazon fell 1.4 per cent after reporting a weaker profit for the summer than analysts expected. A day earlier, Alphabet’s stock dropped more than 12 per cent to its worst day on record after telling investors it burned through more cash during the summer than the spring.
The Dow Jones industrial average was down 572.25 points at 51,770.31. The S&P 500 index was down 140.32 points at 7,580.07, while the Nasdaq composite was down 747.73 points at 25,437.00.
Meanwhile, earnings season is also underway.
“So far so good. It’s very early, but we have a strong start,” David Caron, a portfolio manager of North American equities at iA Global Asset Management, said in a statement.
He added that investors are “desperately looking for hard data on the adoption and progress of AI” and appear to be focusing more on negative surprises.
On Wednesday, the Bank of Canada raised its benchmark interest rate for the first time in more than three years as it tries to get ahead of looming price hikes. The central bank’s policy rate now stands at 2.5 per cent following a quarter-point hike.
Mc Mahon said the move was largely expected by investors.
“We don’t think it was necessary, but it’s more about the waiting scheme so the bank is looking at inflation broadening to other components outside of gasoline,” he said.
Going forward, signs that economic growth stalled over the summer have some economists debating the timing of the Bank of Canada’s next interest rate hike. Statistics Canada said Friday that real gross domestic product was essentially unchanged for a second straight month in August, falling short of economists’ expectations.
Looking ahead to next week, Mc Mahon said he will be watching the federal budget closely on Thursday.
“I don’t know if (the federal government) still has some dry powder. They announced quite a bit since the budget of the last year,” he said.
Prime Minister Mark Carney has been focused on an aggressive infrastructure agenda to build the economy in the face of U.S. tariffs and geopolitical changes.
The Canadian dollar traded for 71.63 cents US compared with 71.51 cents US on Thursday.
The December crude oil contract was up US$2.12 at US$104.12 per barrel.
The December gold contract was down US$132.50 at US$3,898.90 an ounce.
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Daniel Johnson, The Canadian Press
With files from The Associated Press
This report by The Canadian Press was first published Oct. 30, 2026.
