North American shares closed lower Wednesday after a day of choppy trading, but financial markets were generally calmer after several days of high volatility and steep losses.
The S&P/TSX composite index lost 0.1 per cent to 15,346 points in Toronto as lower oil prices weighed on the index.
The benchmark U.S. crude price tumbled 2.5 per cent to $61.79 US a barrel — its lowest since early January after data showed that stockpiles grew the most since September.
That led energy shares to fall by about one per cent.
The Canadian market had snapped a six-day losing streak on Tuesday, as Wall Street also bounced back near the end of the trading day.
Volatile shares of marjiuana producers also led the declines, with Canopy Growth closing down more than four per cent.
Shares of investment firm Canaccord Genuity also fell almost five per cent despite the fact its third-quarter revenue beat expectations.
The Canadian dollar, meanwhile, traded at an average value of 79.71 US cents, lower than Tuesday's average of 79.81 cents.
The loonie has weakened in the past few days as investors fled to the safety of the U.S.dollar amid volatility.
Unready for surprises
The CBOE Volatility index, known as the VIX, which is considered the best gauge of expected volatility on Wall Street, was at 26 — more than double where it was two weeks ago. But it had spiked to over 50 on Tuesday.
Mark McCormick of TD Securities said the recent market action signals investors are not ready for "upside surprises" in inflation, given years of "downside misses."
"The primary takeaway is that markets are not prepared for an abrupt tightening of financial conditions," he said in a note.
"Now, equity valuations (particularly in the U.S.) might look much less attractive against higher real rates."
The downward market spiral began on Friday after U.S. jobs data showed wages growing faster than expected, which raised the prospect of higher inflation that could prompt the Federal Reserve to raise interest rates by more than expected.
On Tuesday, however, St. Louis Federal Reserve president James Bullard cautioned against interpreting any good news from the labour market as resulting directly in higher inflation.
In New York, the Dow Jones industrial average closed down almost 0.1 per cent or 19 points to 24,893.
Volatile trading Tuesday saw the Dow Jones lose as much as 567 points in the morning, followed by a 569-point surge near the end of the day to finish higher by 2.3 per cent.
On Tuesday, it had briefly entered into correction territory, which is a 10 per cent drop from its peak.
The S&P 500 lost 0.5 per cent to 2,682, while the Nasdaq composite finished down 0.9 per cent at 7,052 points.
Tech giants such as Apple and Facebook saw some of the biggest losses in the market, closing down more than two per cent and nearly three per cent respectively.
On the other end, shares of casino company Wynn Resorts rose over eight per cent after CEO Steve Wynn resigned in the wake of allegations of sexual misconduct.
U.S. President Donald Trump took to Twitter for the first time to post his view of what's been happening in the markets on Wednesday.
In the “old days,” when good news was reported, the Stock Market would go up. Today, when good news is reported, the Stock Market goes down. Big mistake, and we have so much good (great) news about the economy!— @realDonaldTrump
Around the world
Asian markets closed mixed overnight, taking cues from the volatile trading day in North America on Tuesday.
The region's biggest market — Japan's Nikkei 225 index — finished higher by 0.2 per cent to 21,645, while Hong Kong's Hang Seng index was down 0.9 per cent to 30,323 points.
Mainland Chinese shares saw bigger losses with the Shanghai composite down 1.8 per cent to 3,310.
In Europe, the benchmark Stoxx 600 index closed higher by over two per cent — with all major stock exchanges and sectors in positive territory.