TORONTO — Stock markets in Canada and the U.S. fell on Wednesday, amid weakening commodity prices and sharp swings in AI stocks.

“We’re in a market where it’s more about selling the rumour and buying the facts. So whenever there’s an immediate headline, the immediate market reaction is to sell that, review it, and then perhaps come back later and buy the dip,” said Kevin Headland, co-chief investment strategist at Manulife Investment Management.

He added that the re-escalation of the conflict in the Middle East has created negative headwinds in the market.

The price for a barrel of Brent crude oil rose 1.8 per cent to US$93.10 after President Donald Trump warned Iran would “pay the price” for stalled negotiations between the two on their war. The war has been keeping the Strait of Hormuz effectively shut to oil tankers, which has prevented the delivery of crude from the Persian Gulf to customers worldwide.

The July crude oil contract was up US$1.83 at US$90.03 per barrel.

High oil prices have sent inflation higher, and a report on Wednesday showed that prices for U.S. consumers jumped in May at the highest speed in three years.

Wall Street has been shaky since last week, when AI stocks went from roaring to records to suddenly turning lower. Among the worries is that their prices have simply shot too high, too fast because of AI mania. The question now is whether the break lower has cleared out excessive optimism that may have built into their stock prices, or if it’s the start of a longer downturn.

In New York, the Dow Jones industrial average was down 953.33 points at 49,918.78. The S&P 500 index was down 119.66 points at 7,266.99, while the Nasdaq composite was down 509.32 points at 25,169.50.

Super Micro Computer, which sells AI servers, tumbled 28 per cent after saying late Tuesday that it plans to raise US$7 billion in cash by selling shares of stock and convertible preferred stock. Such moves raise the most money for companies when their stock prices are high, and they can dilute the ownership stakes of existing shareholders.

Nvidia, the chip company that’s grown into a nearly US$4.9 trillion behemoth because of the AI boom, was the heaviest weight on the S&P 500 after falling 3.7 per cent. The second-heaviest was another AI winner, Broadcom, which fell 5.1 per cent.

Some of the pressure on AI stocks could also be coming from investors pulling cash out to prepare for high-profile debuts on the U.S. stock market for several AI giants. SpaceX’s initial public offering could come later this week, for example.

The S&P/TSX composite index was down 260.37 points at 34,151.32.

In Canada, investors digested a move from the Bank of Canada to hold its key interest rate steady for a fifth consecutive decision on Wednesday. Governor Tiff Macklem also said that while the economy is weak, he wouldn’t say it’s in a recession.

Headland said comments from the central bank appeared to be more dovish.

“The market seems to be reducing the pricing of rate hikes this year, which I think is a positive read-through for the markets,” he said.

On the TSX, the basic materials sector led the overall index lower.

The August gold contract was down US$153.10 at US$4,286.40.

Headland said declines in the price of gold have a “contagion impact on silver” as well, which “drags the commodity sector down.”

The Canadian dollar traded for 71.79 cents US compared with 71.70 cents US on Tuesday.

This report by The Canadian Press was first published June 10, 2026.

— With files from The Associated Press.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Daniel Johnson, The Canadian Press