Shopify Inc.’s stock decline weighed heavily on the S&P/TSX Composite Index on Tuesday as a round of layoffs at the Canadian tech giant added to investor worries about the economy.

The Canadian benchmark index closed 131.80 points lower, or 0.69 per cent, to 18,972.68. The worst-performing stock and biggest drag on the index was Shopify, which closed with a 13.63 per cent loss at $40.69 in Toronto.

Shopify announced it laid off 10 per cent of its workforce, or about 1,000 employees, earlier in the day as Chief Executive Officer Tobi Lutke admitted that his big bet on e-commerce in the post-pandemic world didn’t pay off as he initially expected. 

The revelation from Shopify came on the heels of Walmart Inc.’s second profit warning in as many months, further souring investor sentiment.

Notably, retail stocks such as Canada Goose Holdings Inc., Aritizia Inc. and Canadian Tire Corp. were among some of the worst-performing companies on the TSX.

In New York, markets ended sharply lower. The S&P 500 fell 1.15 per cent, the Dow lost 0.71 per cent and the Nasdaq closed 1.87 per cent lower.

“Walmart is pretty big and they do have a global footprint, but their footprint is biggest in the U.S. I would guess that all consumers everywhere are being affected by food and fuel. And that's kind of what Walmart intimated, was that their typical consumer was looking at discretionary purchases like clothing and home goods,” Kim Forrest, founder and chief investment officer at Bokeh Capital Partners, said in an interview Tuesday.

“I would think that this is going to bleed over into other nations, not just in the U.S.”

Investors also received a barrage of earnings after the close of trading. Here are some of the most notable companies:

• Canadian National Railway beat second-quarter profit and revenue estimates and reaffirmed its full-year forecast of 15 to 20 per cent adjusted profit growth. CN’s operating ratio also improved to 59.3 per cent in the quarter.
• Microsoft Corp.’s profit and revenue fell short of estimates in its fiscal fourth quarter. The key cloud segment also posted disappointing sales.
• Alphabet Inc., the parent company of Google, reported second-quarter revenue excluding traffic acquisition costs that was slightly below estimates. However, advertising revenue for Google came in a bit stronger than expected.

Benchmark West Texas Intermediate oil settled US$1.72 lower at US$94.98 per barrel.

The Canadian dollar was down 0.23 per cent at 77.61 cents U.S.