TORONTO – Most North American equity markets fell after a strong start to May as the tech sector came under pressure in the United States.

Several large US tech giants were down with Apple Inc. down 3.5% amid a rotation away from market growth areas that have performed well during pandemic lockdowns.

“People are getting pretty shy about the tech industry in general right now,” said Sid Mokhtari, executive director of institutional equity research at CIBC.

The tech sector has also been hit by comments from Treasury Secretary Janet Yellen that interest rates may have to rise to keep the economy from overheating. The sector tends to underperform due to concerns about rising rates.

The comments of the former Federal Reserve chairperson carry weight, Mokhtari said.

With his successor, Jerome Powell, insisting that the monetary stimulus will stay in place despite corporate concerns about inflation, Yellen could play the bad cop at Powell’s good cop.

“It at least opens the door to that bias,” Mokhtari said in an interview. “Maybe she played a little devil’s advocate role there to soften or deflate some of that bubble that’s been built into asset prices.”

Several Canadian tech companies were also down that day, but industry heavyweight Shopify Inc. gained 2.2 percent to push the industry slightly into positive territory.

The S & P / TSX Composite Index closed 25.13 points lower at 19,188.03 after hitting an intraday low of 19,052.41.

In New York, the S&P 500 was down 28.00 points to 4,164.66, while the high-tech Nasdaq composite was down 261.62 points, or 1.9%, to 13,633.50 .

The Dow Jones Industrial Average, which tracks 30 large blue chip stocks, rose 19.80 points to 34,133.03.

Technology and telecommunications were barely positive as nine of the other major sectors lost ground on Tuesday.

Healthcare, consumer discretionary and energy were the main drivers.

Healthcare lost 3.8 percent as Bausch Health Companies Inc. fell 10.7 percent after reporting a larger loss of US $ 610 million in the first quarter after taking depreciation charges.

Consumer discretionary was down 1.3%, Dollarama Inc. was down 2.5%.

Energy has lagged despite rising crude oil prices, as shares of Cenovus Energy Inc. fell 4.8% after ConocoPhillips announced plans to sell its roughly 10% stake in Cenovus in as part of a plan to pay for the repurchase of its own shares.

The June crude contract rose US $ 1.20 to US $ 65.69 per barrel and the June natural gas contract fell a tenth of a cent to nearly US $ 2.97 per mmBTU.

The Canadian dollar traded against 81.20 US cents compared to 81.44 US cents on Monday.

Materials were a bit lower, as metal prices fell and offset gains at some logging companies.

The June gold contract was down US $ 15.80 to US $ 1,776.00 per ounce and the July copper contract was down 0.7 cents to US $ 4.52 per pound.

The shares of Domtar Corp. jumped 19.5% to $ 59.40 after the pulp and paper producer admitted it was in talks to sell or merge with Paper Excellence.

West Fraser Timber Co. Ltd. grew 4.9 percent while fertilizer company Nutrien Ltd. gained about 4.6 percent.

Industrials were also down, with shares of Ballard Power Systems Inc. falling nearly 20 percent, while Air Canada was down 2.2 percent.

Despite a good start to May on Monday, the month has always been weaker, Mokhtari said.

Over the past 30 years, April has had a “good batting average” at around 80 percent positive while May is only 60 percent positive.

The TSX has outperformed the S&P and the Nasdaq because its makeup is less focused on tech stocks, while commodities have been performing strong lately.

And the Canadian market has historically outperformed its US counterparts in May, he said.

“When we put all of this together, the TSX is likely to outperform the US in May.”

This report by The Canadian Press was first published on May 4, 2021.

Companies in this story: (TSX: WFG, TSX: UFS, TSX: NTR, TSX: DOL, TSX: APHA, TSX: BHC, TSX: CVE, TSX: SHOP, TSX: AC, TSX: BLDP, TSX: GSPTSE, TSX: CADUSD = X)

Ross Marowits, The Canadian Press