Markets Open Mixed as Inflation Data and Metal Selloff Shake Early Confidence

Toronto – October 22, 2025 (10:16 a.m. EST) — North American markets opened on shaky footing Wednesday morning as investors weighed stubborn inflation, a stronger U.S. dollar, and a broad selloff in precious metals. What began as a quiet morning turned into a more defensive tone across major indices, particularly in Canada’s resource-heavy market.

At the open:

S&P 500: -0.2 %

Dow Jones Industrial Average: +0.1 %

Nasdaq Composite: -0.3 %

S&P/TSX Composite: -0.6 %

The early session shows investors cautious rather than panicked — but the message is clear: inflation’s staying power and global commodity weakness are once again steering sentiment.

Inflation Stubborn, Rate-Cut Hopes Fade

Canada’s latest CPI data came in hotter than expected, marking the third consecutive month above the Bank of Canada’s comfort range. That immediately pushed rate-cut bets further out and sent ripples through financial and consumer sectors.
Across the border, investors continue to navigate the data drought caused by Washington’s partial shutdown — meaning U.S. traders are making moves without key macro guidance such as fresh inflation or employment reports.

This “information vacuum” has amplified volatility around every new piece of data that does arrive. For now, the path of rates remains murky, and traders are positioning defensively until clearer signals emerge.

Metals Slide Drags the TSX Lower

The biggest pressure point in early trading is the steep selloff in gold and silver — both down more than 2 % in morning trade — as the U.S. dollar strengthens for a fifth straight session. Mining majors and mid-tier producers are all lower, with gold names leading the retreat.

Energy stocks are faring slightly better, but crude prices have also eased as renewed questions about Chinese demand hit sentiment. The combination of a stronger dollar, weaker commodities, and sticky inflation is toxic for the TSX’s cyclical heart.

Investors are also re-evaluating the Bank of Canada’s likely path: rate-cuts that once seemed possible by year-end now look like a Q1 2026 story at best.

U.S. Markets: Earnings in Focus, Tech Pauses

In the U.S., corporate earnings continue to dominate the conversation. Early releases from names such as Coca-Cola, RTX, and Verizon have generally beaten expectations, helping to offset weakness in semiconductors and large-cap tech.

However, the Nasdaq Composite is under mild pressure as investors take profits in mega-cap AI names that led the rally earlier this month. The rotation toward more defensive sectors — consumer staples, healthcare, and utilities — continues quietly beneath the surface.

Traders are also watching the Treasury market closely after another choppy session Tuesday pushed yields higher. The 10-year yield remains above 4.4 %, keeping equities in check.

Small-Caps: Opportunity Amid Uncertainty

While large-caps dominate the headlines, small-cap stocks remain stuck in the middle of this push-and-pull between growth optimism and inflation anxiety.

The Russell 2000 opened down 0.4 % — modest, but notable given the benchmark’s persistent underperformance in 2025. Liquidity remains thin, and many retail-favourite tickers are drifting without clear catalysts.

Yet there are pockets of strength:

Select biotech names (including those tied to oncology and gene-therapy trials) are seeing speculative inflows.

U.S. energy juniors are modestly higher, tracking early morning gains in crude.

Canadian small-cap technology firms continue to attract interest from institutions searching for growth at a discount.

Still, sentiment across the small-cap complex remains fragile. Funding risk, lack of liquidity, and weak breadth are major headwinds. For now, investors appear more interested in waiting for clarity than chasing risk.

Investor Psychology: Between FOMO and FOWO

After last week’s “FOMO vs. FOWO” split — fear of missing out versus fear of wipe-out — the mood today tilts slightly toward caution. The market’s resilience near all-time highs has kept optimism alive, but each inflation print or rate repricing reignites worries about stretched valuations.

That’s particularly visible in small-caps and cyclicals, where traders are quick to sell strength. The appetite for speculation is not gone, but it’s measured — short bursts of momentum quickly give way to profit-taking.

What’s Next on the Radar

Investors are positioning for several near-term catalysts:

Earnings from Tesla, Netflix, and Intel later this week will test whether corporate fundamentals can still support high valuations.

Global PMIs due Friday may offer the first hard read on manufacturing health in Q4.

Commodity direction — if gold and oil stabilize, the TSX could recover quickly.

U.S. credit headlines — any renewed chatter around regional banks or private-credit stress could reignite volatility.

SCN Takeaway for Retail Investors

At this hour, markets are sending mixed but manageable signals:

Large-caps continue to hold up due to solid earnings and institutional demand.

Small-caps remain range-bound but present selective opportunities for those comfortable with volatility.

Commodities and Canadian equities are under pressure, likely to remain choppy through the week.

For retail investors, the best strategy this morning is discipline — not despair.

Here’s how we see it:

Keep core exposure to high-quality large-caps that can weather rate uncertainty.

Use small-cap exposure tactically — focus on names with clear catalysts or improving balance sheets.

Stay defensive in the short term but ready to deploy cash if volatility creates attractive entries.

Watch for rotation signals: a confirmed breakout in small-caps or materials could mark the next leg of the rally.

Quote of the Day

“Markets don’t fall because of bad news — they fall when there’s no one left to buy.”
— SCN Editorial Team

Right now, buyers are still in the room — but they’re whispering, not shouting.

Bottom Line (10:16 a.m. EST)

The October 22 session opened with a dose of realism: inflation isn’t dead, commodities are struggling, and small-caps still can’t catch a break. Yet the broader market remains calm — suggesting that while risk appetite is contained, confidence hasn’t collapsed.

As the day unfolds, traders will be watching whether the TSX finds footing and whether U.S. tech can re-assert leadership. Until then, this is a market that demands patience, precision, and perspective.

Stay tuned — SCN will continue monitoring intraday moves and small-cap shifts as the session develops.

Written on behalf of the SCN Editorial Team.
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