CANADA STOCKS-TSX struggles for direction as tech worries loom

ReutersFeb 4, 2026 4:06 PM

TSX flat
Energy gains on renewed U.S.-Iran tension
Tech selloff extends
ATS climbs 8.2% after results

By Utkarsh Hathi

Feb 4 (Reuters) - Canada's main stock index struggled for direction on Wednesday, as an ongoing technology selloff, driven by AI-related worries weighing on software firms globally, offset broader advances led by consumer-focused stocks.

The S&P/TSX Composite Index .GSPTSE was up 0.02% at 32,395.55 points as of 10:42 a.m. ET.

An index of consumer discretionary stocks .GSPTTCD jumped 2.2%, and defensive consumer staples .GSPTTCS added 1.6%, boosting the main index. The real estate index .GSPTTRE also gained 2.1%.

However, technology index .SPTTTK was down 1.9%, as it stayed under pressure after the previous day's jitters, sparked by Anthropic's AI chatbot update, which raised concerns about long-term business models for software and analytics firms.

Wall Street's tech-heavy Nasdaq index .IXIC was down 0.5% on Wednesday.

"The market was assuming AI wasn't going to disrupt, and then suddenly woke up and said it is going to disrupt," said Colin White, chief executive officer at Verecan Capital Management.

"We're uncertain as to what the time horizon is and the sell-off in the software space is a good sign of that."

Meanwhile, TSX's energy stocks .SPTTEN gained 0.7%, tracking oil prices, after the U.S. military said on Tuesday it had shot down an Iranian drone that "aggressively" approached the Abraham Lincoln aircraft carrier in the Arabian Sea, raising fears of potential escalation between the nations.

The broader materials sector .GSPTTMT, which includes metal miners, fell 1% as copper prices fell against a stronger dollar. The sectoral losses came despite a continuous rise in precious metals.

Among individual movers, ATS ATS.TO climbed 8.2% after the industrial automation firm's third-quarter revenue beat estimates, while Suncor Energy SU.TO gained 1.6% after its fourth-quarter profit beat estimates on Tuesday after the bell.

Property management firm FirstService FSV.TO rose 5.2% after fourth-quarter revenue slightly beat estimates.

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