TSX slips following hot US inflation data

Canada's main stock index was little changed on Tuesday, as a rise in material and healthcare stocks was offset by stronger-than-expected producer prices data from the U.S. that dampened hopes of interest rate cuts this year.

At 10:19 a.m. ET (14:19 GMT), the Toronto Stock Exchange's S&P/TSX composite index TSX was down 28.09 points, or 0.13%, at 22,231.08.

The materials sector TTMT, which includes precious and base metals miners and fertilizer companies, rose 1.0%, tracking higher copper and gold prices.

The healthcare TTHC index led sectoral gains with a 2.9% rise, after medical cannabis producer Tilray Brands surged more than 9%.

Shares in BlackBerry BB also climbed 16.8% to the top of TSX, following a meme stocks trading frenzy reminiscent of a similar rally in January 2021.

U.S. producer prices increased more than expected in April amid strong gains in the costs of services and goods, indicating that inflation remained at elevated levels early in the second quarter.

Meanwhile, U.S. Federal Reserve Chair Jerome Powell said he expects inflation to continue declining through 2024 as it did last year, though his confidence in that has fallen after prices rose faster than expected through the first quarter.

Investors will now turn their attention to the highly anticipated U.S. consumer price figures due Wednesday.

"More hot inflation data could make the debate about whether 2024 will contain even a single cut", said Chris Larkin, managing director of Trading and Investing at E*TRADE from Morgan Stanley.

Canadian wholesale trade fell by 1.1% in March from February on lower sales in the motor vehicle and motor vehicle parts and accessories subsector.

In corporate news, Hudbay Minerals HBM climbed 8.0% to the top of the materials index, hitting the highest levels in more than 12 years after the miner beat first-quarter profit estimates.