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Stocks moved sharply lower during trading on Tuesday, with the major averages adding to the slim losses posted during Monday’s session. The major averages all showed significant moves to the downside on the day.

The major averages recovered from their worst levels of the day but still posted steep losses. The Dow tumbled 367.17 points or 1.1 percent to 33,684.53, the Nasdaq slumped 132.09 points or 1.1 percent to 12,080.51 and the S&P 500 plunged 48.29 points or 1.2 percent to 4,119.58.

The sell-off on Wall Street came as some traders looked to cash in on recent strength in the markets ahead of the Federal Reserve’s monetary policy announcement on Wednesday.

With the Fed widely expected to raise interest rates by another 25 basis points, traders will pay close attention to the accompanying statement for clues about the outlook for rates.

CME Group’s FedWatch Tool is currently indicating an 87.5 percent chance the Fed will raise rates by 25 basis points and a 72.9 percent chance the central bank will subsequently leave rates unchanged in June.

Concerns about lawmakers’ struggles to reach an agreement on raising the U.S. debt ceiling also weighed on Wall Street.

U.S. Treasury Secretary Janet Yellen has warned the Treasury might run out of money to cover obligations as soon as June 1.

In U.S. economic news, the Commerce Department released a report showing new orders for U.S. manufactured goods increased by slightly more than expected in March.

The Commerce Department said factory orders advanced by 0.9 percent in March after slumping by a revised 1.1 percent in February.

Economists had expected factory orders to climb by 0.8 percent compared to the 0.7 percent decrease originally reported for the previous month.

A separate report released by the Labor Department showed job openings in the U.S. fell by more than expected in the month of March.

The Labor Department said job openings decreased to 9.590 million in March from an upwardly revised 9.974 million in February. With the drop, job openings fell to their lowest level since April 2021.

Economists had expected job openings to decline to 9.775 million from the 9.931 million originally reported for the previous month.

Energy stocks moved sharply lower on the day, with another steep drop by the price of crude oil weighing on the sector.

After slumping $1.12 to $75.66 a barrel in the previous session, crude for June delivery plummeted $4 to $71.66 a barrel amid concerns about the outlook for demand.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plunged by 5.1 percent and the NYSE Arca Oil Index dove by 4.5 percent.

Banking stocks also showed a substantial move to the downside on the day, with the KBW Bank Index tumbling by 4.5 percent to its lowest closing level in over two years.

Networking, brokerage and steel telecom stocks also saw significant weakness, while gold stocks were among the few groups to buck the downtrend amid a spike by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. Japan’s Nikkei 225 Index crept up by 0.1 percent, while Australia’s S&P/ASX 200 Index slid by 0.9 percent following a surprise interest rate hike.

Meanwhile, the major European markets all moved notably lower on the day. While the French CAC 40 Index tumbled by 1.5 percent, the German DAX Index and the U.K.’s FTSE 100 Index both slumped by 1.2 percent.

In the bond market, treasuries showed a strong move back to the upside following the steep drop seen on Monday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 13.5 basis points to 3.439 percent.

Looking Ahead

Trading on Wednesday is likely to be driven by reaction to the Fed’s monetary policy announcement, although reports on private sector employment and service sector activity may attract attention earlier in the day.

On the earnings front, Advanced Micro Devices (AMD), Clorox (CLX), Ford (F) and Starbucks (SBUX) are among the companies releasing their quarterly results after the close of today’s trading.

CVS Health (CVS), Kraft Heinz (KHC) and Yum! Brands (YUM) are also among the companies due to report their results before the start of trading on Wednesday.

Oil prices sank about 5% to a five-week low on Tuesday on concerns about the economy as U.S. politicians discuss ways to avoid a debt default and investors prepare for more rate hikes this week.

Brent futures fell $3.99, or 5%, to settle at $75.32 a barrel, while West Texas Intermediate crude (WTI) fell $4.00, or 5.3%, to end at $71.66.

That was the lowest close for both benchmarks since March 24 and was also their biggest one-day percentage declines since early January.

Oil prices and Wall Street’s main indexes both fell after U.S. Treasury Secretary Janet Yellen said the government could run out of money within a month.

The White House said President Joe Biden would not negotiate over the debt ceiling during his meeting with four top congressional leaders on May 9, but he will discuss starting “a separate budget process.”

U.S. job openings fell for a third straight month in March and layoffs increased to the highest level in more than two years, suggesting some softening in the labor market that could aid the Federal Reserve’s fight against inflation.

“The U.S. economy continues to evolve in a manner consistent with a recession commencing later this year,” analysts at Barclays, a bank, said in a note.

“The manufacturing sector is contracting, the consumer is struggling, … There are broadening signs of cracks emerging within the labor market,” Barclays said.

Later this week, investors will look for market direction from expected interest rate hikes by central banks still fighting inflation. More hikes could slow economic growth and dent energy demand.

The U.S. Federal Reserve is expected to increase interest rates by another 25 basis points on Wednesday.

The European Central Bank is also expected to raise rates at its regular policy meeting on Thursday.

“The … action of central banks in their mission to tame elevated consumer and producer prices … all cast a rather long shadow of doubt on prospects going forward,” oil broker PVM’s Tamas Varga said.

Concerns about diesel demand in recent months, meanwhile, has pressured U.S. heating oil futures to their lowest level since December 2021.

“Oil basically has weakening prospects from the world’s two largest economies, China and the U.S., and if the macro backdrop deteriorates momentum selling could easily send prices below the $70 level,” said Edward Moya, senior market analyst at data and analytics firm OANDA.

Over the weekend, data from China, the world’s top crude importer, showed manufacturing activity fell unexpectedly in April. That was the first contraction in the manufacturing purchasing managers’ index since December.

IRAN OIL OUTPUT RISING

On the supply side, Iran’s oil production surpassed 3 million barrels per day (bpd), its oil minister said. The OPEC member, which has been under U.S. sanctions since 2018, pumped 2.4 million bpd on average in 2021.

The market shrugged off news that the Organization of the Petroleum Exporting Countries’ output fell in April, as sanctioned countries Russia and Iran continued to find outlets for their crude.

Meanwhile, U.S. crude stockpiles were forecast to have drawn down for a third week in a row for the first time since December, falling some 1.1 million barrels last week, according to analysts in a Reuters poll.

The poll was conducted ahead of reports from the American Petroleum Institute, due at 4:30 p.m. EDT on Tuesday and the U.S. Energy Information Administration (EIA) at 10:30 a.m. EDT on Wednesday.

Published: 5/2/2023 5:25 PM ET

The Canadian market ended notably lower on Tuesday, weighed down by losses in energy and financials shares.

Worries about growth and likely policy tightening by the Federal Reserve contributed to the weakness in the market.

The benchmark S&P/TSX Composite Index, which tumbled to 20,282.14 around late morning, losing more than 330 points in the process, ended down 207.54 points or 1.01% at 20,407.56.

The Energy Capped Index fell 4.64%. Imperial Oil (IMO.TO), Baytex Energy (BTE.TO), Vermilion Energy (VET.TO), Advantage Oil & Gas (AAV.TO), Precision Drilling (PD.TO), Cenovus Energy (CVE.TO), Crescent Point Energy (CPG.TO), Suncor Energy (SU.TO), Canadian Natural Resources (CNQ.TO), Whitecap Resources (WCP.TO) and Enerplus Corp (ERF.TO) lost 4 to 7%.

Bank of Montreal (BMO.TO), Canadian Imperial Bank of Commerce (CM.TO), Laurentian Bank (LB.TO), Bank of Nova Scotia (BNS.TO) and Royal Bank of Canada (RY.TO) ended lower by 2 to 3%. CDN Western Bank (CWB.TO), Toronto-Dominion Bank (TD.TO) and Sun Life Financial (SLF.TO) also ended notably lower.

Among other major losers, Colliers International (CIGI.TO) plunged nearly 10%. Goeasy (GSY.TO), Bombardier Inc (BBD.B.TO), West Fraser Timber (WFG.TO) and Kinaxis Inc (KXS.TO) lost 1 to 3.4%.

Molson Coors Canada (TPX.A.TO) rallied more than 6%. Osisko Gold Royalties (OR.TO) surged 6.3%. Wheaton Precious Metals (WPM.TO) and Agnico Eagle Mines (AEM.TO) gained 4.8% and 4.5%, respectively.

Published: 5/1/2023 2:10 PM ET

Gold futures settled lower on Monday as the dollar climbed up amid bets about a rate hike ahead of the Federal Reserve’s policy announcement.

The Federal Reserve is scheduled to announce its monetary policy on Wednesday. The central bank is widely expected to raise rates by 25 basis points. As per the CME FedWatch tool, probability for a 25 basis points hike now stands at 84.3 percent, versus 83.9 percent a day earlier and 90.5 percent a week earlier.

In addition to the Federal Reserve, the European Central Bank, the Bank of England as well as the Reserve Bank of Australia are undertaking a review of interest rates in the next few days.

The dollar index surged to 102.19, gaining more than 0.5%.

Gold futures for June ended lower by $6.90 or about 0.4% at $1,992.20 an ounce, the lowest close in more than a week.

By RTTNews Staff Writer   ✉  | Published: 5/1/2023 2:10 PM ET

Gold futures settled lower on Monday as the dollar climbed up amid bets about a rate hike ahead of the Federal Reserve’s policy announcement.

The Federal Reserve is scheduled to announce its monetary policy on Wednesday. The central bank is widely expected to raise rates by 25 basis points. As per the CME FedWatch tool, probability for a 25 basis points hike now stands at 84.3 percent, versus 83.9 percent a day earlier and 90.5 percent a week earlier.

In addition to the Federal Reserve, the European Central Bank, the Bank of England as well as the Reserve Bank of Australia are undertaking a review of interest rates in the next few days.

The dollar index surged to 102.19, gaining more than 0.5%.

Gold futures for June ended lower by $6.90 or about 0.4% at $1,992.20 an ounce, the lowest close in more than a week.

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Silver futures for July edged up $0.004 to settle at $25.230 an ounce, while Copper futures for July settled at $3.9340 per pound, gaining $0.0435.

In economic news today, a report released by the Institute for Supply Management today showed manufacturing activity in the U.S. contracted for the sixth consecutive month in April, although the pace of contraction slowed by more than expected.

The ISM said its manufacturing PMI rose to 47.1 in April from 46.3 in March, with a reading below 50 indicating a contraction. Economists had expected the index to inch up to 46.6.

The Commerce Department also released a report showing an unexpected increase in U.S construction spending in the month of March.

Published: 5/1/2023 3:11 PM ET

Crude oil prices tumbled on Monday, weighed down by concerns about economic growth and worries about outlook for energy demand.

Data showing a contraction in Chinese manufacturing activity and a potential interest rate hike by the Federal Reserve weighed as well.

West Texas Intermediate Crude oil futures for June ended lower by $1.12 or about 1.5% at $75.66 a barrel.

Brent crude futures settled at $79.31 a barrel, down $1.02 or about 1.3% from the previous close.

The Federal Reserve, scheduled to announce its monetary policy on Wednesday, is widely expected to raise interest rate by 25 basis points.

The CME FedWatch tool, currently indicates that markets have priced in an 89.5% probability for a 25-basis points rate hike by the Fed in the forthcoming review. The same was 83.9% a day earlier and 90.5% a week earlier.

Data released by the National Bureau of Statistics over the weekend showed the Purchasing Managers’ Index (PMI) for China’s manufacturing sector came in at 49.2 in April, down from 51.9 in March.

A sub-index to measure new orders dipped to 48.8 from 53.6, indicating decline in market demand and acting as a major contributor to the fall

Published: 5/1/2023 5:15 PM ET

The Canadian market failed to hold early gains and ended marginally down on Monday due largely to some heavy selling at several counters in the energy sector.

Energy stocks fell as crude oil prices tumbled amid concerns about the outlook for energy demand after data showed a contraction in Chinese factory activity.

Investors also looked ahead to the Federal Reserve’s monetary policy announcement, due on Wednesday. The U.S. central bank is widely expected to raise interest rates by 25 basis points.

The benchmark S&P/TSX Composite Index ended down 21.44 points or 0.1% at 20,615.10, near the day’s low. The index climbed to 20,766.87 in early trades, before drifting lower as the day progressed.

Precision Drilling Corporation (PD.TO), Teck Resources (TECK.A.TO), Shopify Inc (SHOP.TO), goeasy (GSY.TO), FirstService Corporation (FSV.TO), Colliers International (CIGI.TO) and Fairfax Financial Holdings (FFH.TO) lost 1 to 2.7%.

Cargojet Inc (CJT.TO) climbed nearly 4% on strong results. The company reported a net income for $30.5 million for the quarter ended March 31, 2023, compared to a net loss of $56.4 million in the year-ago quarter.

Bombardier Inc (BBD.A.TO) surged nearly 4%. CCL Industries (CCL.B.TO), ATS Corporation (ATS.TO), Dollarama (DL.TO), BRP Inc (DOO.TO), Constellation Software (CSU.TO), Franco-Nevada Corporation (FNV.TO) and Kinaxis Inc (KXS.TO) climbed 1 to 2.5%.

On the economic front, data released by Markit Economics shows the S&P Global Manufacturing PMI rose to 50.2 in April 2023, pointing to a marginal expansion in the manufacturing sector after posting a near three-year low of 48.6 in the previous month.

An unprecedented push by the federal government to shape Canada’s power grid is about to ramp up – and face its first major test, courtesy of an Ontario government with a different view of electricity’s future.

After using its recent budget to introduce subsidies for both private and public entities that invest in non-emitting electricity, Ottawa will this summer put forward its proposed new law to restrict provinces from generating power from fossil fuels.

The primary target of the rules, known as the Clean Electricity Regulations, will be natural gas – the energy source that Ontario and several other provinces want to use to help meet surging electricity demand in the coming decades.

While details are still being hammered out, the government has indicated that the regulations – to be implemented under the Canadian Environmental Protection Act, meaning non-compliance could mean criminal prosecution – will require gas plants lacking carbon-capture technology to curtail operations starting in 2035.

Despite that date being more than a decade away, Ottawa is counting on its carrot-and-stick approach to already steer investment decisions.

The idea is to accelerate a shift in which technological advances and falling prices are already making renewables increasingly attractive relative to gas. As new federal tax credits for wind, solar and energy storage (plus hydro and nuclear) make those sources more economical, the regulations are meant to make new gas plants financially unviable, because they would have to close early in their natural lifespans.

The question is how much the federal intervention will achieve that, and how much provinces that believe gas is needed will keep investing in it – transferring risk of stranded assets onto ratepayers or taxpayers.

The answer will depend partly on whether a government with little experience in electricity policy (which is mostly provincial jurisdiction) strikes the right balance in building some flexibility into the regulations, without leaving glaring loopholes that undermine national emissions targets.

In an interview, Environment Minister Steven Guilbeault called it “one of the most complex regulations that we’ll have to do.” He acknowledged the challenge of promoting not just sustainability but also affordability and reliability, in a way that fits different electricity systems in each province.

In other interviews, a range of executives working in the electricity sector – including with provincial agencies, energy companies and industry associations – praised Mr. Guilbeault for being consultative during the policy’s development.

They believe he has put some water in his wine, by shifting from initial plans to require a fully non-emitting grid by 2035 toward still allowing limited use of unabated gas at times of peak demand, although the sector faces major uncertainty as it awaits specifics.

But before those details are released, the biggest province is proceeding with a gas procurement that will give a measure of whether the federal plan is achieving its intended market impact, or causing unintended consequences.

Ontario does not appear to have the toughest path to a net-zero grid. Less than 10 per cent of its power now comes from gas, which has a greater share of grid capacity but is only maximized at times of peak demand; the rest is non-emitting, with nuclear the biggest source.

That’s a better starting point than in Saskatchewan, Alberta, Nova Scotia and New Brunswick, which are still weaning themselves off much dirtier coal (if not as good as hydro-rich Quebec, British Columbia, Manitoba and Newfoundland and Labrador, which don’t significantly rely on fossil fuels).

Nor has Premier Doug Ford – who touts reliable low-emissions electricity as key to wooing investment such as electric-vehicle manufacturing – joined Alberta’s Danielle Smith and Saskatchewan’s Scott Moe in publicly attacking the planned regulation.

But Mr. Ford’s government sees a continued role for gas, at minimum as a transitional fuel. So it has directed Ontario’s Independent Electricity System Operator (IESO) to secure contracts for up to 1,500 megawatts of new gas power.

That’s atop roughly 10,000 megawatts of gas capacity now. It’s one of the ways – alongside adding up to 2,500 megawatts of battery-storage capacity, more aligned with the federal strategy – that Ontario intends to both make up for nuclear power coming offline this decade (because of closings and refurbishments) and address rising demand.

Initial results of the procurement are expected to be announced in May or June, probably a month or two before the draft Clean Electricity Regulations. But the new rules are already impacting the type of contracts likely to be awarded.

Much of that influence stems from Ottawa already indicating, in a framework for the regulations last year, that any gas units operational before 2025 will be allowed to run for an (as yet unspecified) period past 2035. By contrast, any new generation that comes online from 2025 onward will seemingly only be permitted to operate from 2035 in very limited periods of peak demand.

Consequently, while expanding capacity at existing gas plants is proving a viable option, building entirely new ones is not.

“I don’t know that we’ll see a greenfield natural-gas plant show up,” said Chuck Farmer, an IESO vice-president. “But I do think there are opportunities to get more megawatts out of existing plants to carry us through this transition.”

The discouragement of new plants means Ottawa’s strategy is starting to achieve its intended purpose.

“They thought this was going to deter unabated gas in Canada,” said Chris Kopecky, a senior vice-president with Capital Power, one of the bigger energy producers bidding for contracts in Ontario procurement, including site expansions in Windsor and the Greater Toronto Area. “And I think it’s having that effect.”

But the expansions are where there may be the unintended consequence of financial-risk transfer.

Timing could be tight even to add gas turbines to existing facilities within a year and a half, and nobody yet knows how long past 2035 any units will be grandfathered. So Ontario will structure contracts to assure private companies that they’ll be able to earn back their investment.

One way that the province has indicated it will provide that assurance: guaranteeing companies payment past 2035, likely to 2040, even if facilities can’t operate. So Ontarians could spend years paying for power to not be generated.

That may not be enough, though, considering gas contracts have previously been awarded on a 20-year basis. So Ontario may also commit to paying premium rates for generation over shortened operational periods.

Clearly, that’s not quite what Ottawa has in mind. “I think every jurisdiction should think long and hard before investing in facilities that could become very expensive to operate come 2035,” Mr. Guilbeault said.

Ontario’s dynamic is somewhat unique. It’s the only province now in the midst of signing new gas contracts, though others (notably Alberta) are already building gas facilities that should be done by 2025.

Alberta and Saskatchewan also have a better chance of using carbon capture to make gas generation compliant. That’s not as viable in Ontario, because geologically it has lower carbon-storage capacity.

Still, Ontario will set the early national tone for how the federal strategy works in practice – although it will be easier to judge the contracts it reaches, and the example they set, once Mr. Guilbeault lays out the regulations’ details.

Along with how older facilities will be grandfathered, the information most eagerly awaited by industry is how much all plants will be allowed to keep operating at times of extreme peak demand. The common perception is that Ottawa will craft the regulation to permit that to happen a few days a year. But the fine print will be crucial.

What’s clear so far is that it won’t be business as usual.

A question hanging over the regulations has been whether provinces might simply ignore the new requirements – hoping a different federal government will reverse the regulations before 2035, or that no government will risk power shortages by enforcing it.

But that’s clearly not a mentality that the electricity sector is willing to adopt.

“The nature of the tool that’s being used is pretty strict,” said Michael Powell, the vice-president for government relations with Electricity Canada, the industry association.

“I don’t think our members want to be in a position where they’re staring down a bluff with the Government of Canada.”

Oil fell on Monday as concern over the economic impact of the U.S. Federal Reserve potentially raising interest rates and weaker Chinese manufacturing data outweighed support from new OPEC+ supply cuts taking effect this month.

The Fed, which meets on May 2-3, is expected to increase interest rates by another 25 basis points. The U.S. dollar rose against a basket of currencies on Monday, making oil more expensive for other currency holders.

“The prospect of further rate hikes to be announced by the Fed this week is expected to drive an increase in near-term price volatility,” said Baden Moore, head of commodity and carbon strategy at National Australia Bank (NAB).

Brent crude fell $1.64, or 2.0 per cent, to $78.69 a barrel at 0947 GMT, while U.S. West Texas Intermediate (WTI) crude slid $1.66, or 2.2 per cent, to trade at $75.12.

“The failure to reach more solid ground above $80.50 in Brent points to continued selling interest amid the well known growth/demand concerns,” said Ole Hansen, head of commodity Strategy at Saxo Bank.

Banking fears have weighed on oil in recent weeks and in what is the third major U.S. institution to fail in two months, United States regulators said on Monday First Republic Bank has been seized and a deal agreed to sell the bank to JPMorgan.

Weak economic data from China was in focus. China’s manufacturing purchasing managers’ index (PMI) declined to 49.2 from 51.9 in March, slipping below the 50-point mark that separates expansion and contraction in activity on a monthly basis.

Some support came from voluntary output cuts of around 1.16 million barrels per day by members of the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, which take effect from May.

“We believe the oil market will be in deficit through the remainder of the second quarter” following the OPEC+ cuts, said NAB’s Moore, who added that the bank expected the curbs plus higher demand to drive prices higher.

The bankers running the sale process for Subway have given the private equity firms vying for the sandwich chain a US$5-billion acquisition financing plan, hoping to overcome a challenging environment for leveraged buyouts and fetch the company’s asking price of more than US$10-billion, people familiar with the matter said.

Interest rates have been rising and concerns about an economic slowdown have increased since Subway said in February it was exploring a sale, making debt more expensive and less available for buyout firms pursuing deals. This is weighing on how much the private equity firms are offering to buy companies.

So far, bids for Subway have ranged between US$8.5-billion and US$10-billion, one of the sources said. Subway’s financial adviser, JPMorgan Chase & Co., is now hoping a US$5-billion debt financing package it has put forward will show buyout firms they can borrow enough to structure an attractive deal even at a US$10-billion-plus valuation, the sources said.

The debt financing is based on a mix of loans and bonds and its size is equivalent to 6.75 times Subway’s 12-month earnings before interest, taxes, depreciation and amortization of about US$750-million, the sources added.

It is possible that this financing will serve only as a temporary solution. This is because a cheaper option for a private-equity buyer of Subway would likely be to finance the acquisition long-term through a so-called whole business securitization (WBS), the sources said. This would involve borrowing using the royalties of restaurant franchises as collateral.

WBS financing requires store-by-store due diligence by ratings agencies which can take more than a year. Bidders would have to rely on JPMorgan’s debt package or arrange their own financing to clinch a deal with Subway, and then refinance through a WBS scheme down the line, the sources said.

Barclays Plc, a major player in the market for WBS financing, is one of the banks in discussions about long-term financing, the sources said.

Milford, Conn.-based Subway has been revamping its operations to deal with outdated decor and US$5 deals on foot-long sandwiches that eroded franchisees’ profits. In 2021, the chain launched a menu overhaul and splashy marketing campaign as it embarked on a turnaround plan that has helped sales grow.

JPMorgan’s financing package also offers the option of a preferred equity component with a roughly 15-per-cent interest rate, the sources said. This is a more expensive route that private equity firms may not opt for, three of the sources added.

To be sure, Subway is allowing bidders to use any financing route they want, as long as they can show they can secure committed financing.

Second-round bids for Subway came in last week from more than 10 private-equity firms, one of the sources said, adding that Subway has dropped low bids and is whittling down the pool of final bidders. Bain Capital, TPG Inc., Advent International Corp., TDR Capital, Goldman Sachs Group Inc.’s buyout arm and Roark Capital are among the private-equity firms that are participating in the auction, according to the sources.

Subway will soon allow bidders to team up before submitting final offers, and Bain, TPG and Advent have already been in discussions about doing so, the sources added.

The sources requested anonymity because details of the sale process are confidential. Bain, TPG and Advent declined to comment. TDR and Roark did not immediately respond to comment requests. Subway, JPMorgan, Goldman Sachs and Barclays declined to comment.

Founded in 1965 by 17-year-old Fred DeLuca and family friend Peter Buck, the company has been owned by the founding families since its first restaurant opened as “Pete’s Super Submarines” in Bridgeport, Conn.

The chain, which has nearly 37,000 locations globally, is moving away from its traditional reliance on franchisees who own only one or two locations and is instead consolidating locations with fewer and larger, well-capitalized franchisees.

Subway reported earlier this month that global comparable sales were 12.1-per-cent higher in the first quarter and that guest visits rose, driven in part by restaurant renovations. It has been facing growing competition from rivals such as Jimmy John’s, Firehouse Subs, Jersey Mike’s Subs and Potbelly Corp.

TPG and Bain were part of a group that owned Burger King when John Chidsey, who is now Subway’s chief executive, headed that burger fast-food restaurant chain. Advent, for its part, has invested in restaurants including Bojangles and café operator First Watch. TDR operates grocery retailer ASDA and gas station conglomerate EG Group.