12:33 PM EDT, 05/01/2024 (MT Newswires) -- The TSX is down 55 points at midday with most sectors in the red.

The biggest decliners are the healthcare/cannabis sector, which is down 5.3%, followed by energy (-1.9%) and miners (-1.2%).

Cannabis stocks surged Tuesday afternoon on reports that the U.S. Drug Enforcement Administration intends to reclassify marijuana to Schedule 3 of the Controlled Substances Act. Canopy Growth, which almost doubled to hit $20.45 yesterday on the news, is down 29% to $14.63. It is also the most actively traded on the TSX with 4.7 million shares changing hands.

Utilities and telecoms are the biggest gainers, up 0.8% and 0.7%, respectively.

In commodities, oil prices fell early on Wednesday after a report showed an unexpected rise in US crude inventories, while investors await clarity on US monetary policy with an afternoon end to the Federal Open Market Committee's two-day meeting. Meanwhile, geopolitical risks ease.

Gold edged higher as the dollar steadied and treasury yields were mixed ahead of the end of the Fed meeting.

BMO Economics in its morning note said the key event to watch is the FOMC announcement at 2:00 pm ET and Chair Powell's press conference at 2:30 ET. BMO believes the Fed will continue to stay on hold. For its own part, BMO last week pushed back its call for the first cut to September (from July previously). But, as BMO's Michael Gregory suggests, the policy statement may include some changes, especially around quantitative tightening. Plans for tapering will probably be detailed separately and BMO sees the cap for Treasuries declining (to match MBS at) US$35 billion. But it wouldn't be surprised if both thresholds dropped to US$30 billion. BMO will also be watching Chair Powell's comments at the presser to see what he says about the persistence in inflation.

Meanwhile, BMO also noted, in Canada, BoC Governor Macklem and Senior Deputy Governor Rogers will appear before the Standing Senate Committee on Banking, Commerce, and the Economy at 4:15 pm ET.

Elsewhere, Wells Fargo Investment Institute has published Market Commentary in which it said the better growth in the United States that seems to beresulting from easier financial conditions has allowed it to raise its GDP estimates this year to 2.5%. Next year, WFII continues to see accommodative conditions and a Fed that has modestly cut interest rates to lead to 2.1% growth. And this better growth should also result in higher earnings for corporations, it added.

WFII said: "While the inflationary decline has stalled in recent months, we expect to see disinflation as the economy slows further this year, which should spark a pickup in economic growth from those segments that will benefit from easier and cheaper bank credit. Even if inflation should tick higher again as economic growth broadens and becomes more consistent across segments, we expect an equal broadening of opportunities in equity markets."