Canada’s main stock index rose on Tuesday in holiday-thinned trading as higher oil prices boosted energy shares, with the index adding to its gains over the previous two sessions to claw back some of its monthly decline.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 97.84 points, or 0.4%, at 24,846.82. Still, the index has lost 3.1% since the beginning of the month after notching in November its biggest monthly gain in a year.
“I think we borrowed earlier this year from the ‘Santa Claus rally’, meaning the gains you would normally have seen this time of year, we have probably already experienced those gains earlier in November,” said Allan Small, senior investment adviser at Allan Small Financial Group with iA Private Wealth.
The “Santa Claus rally” refers to historically strong gains for the stock market in the last five trading days of the year combined with the first two of the following year.
Trading volumes were lighter than usual on Tuesday, and the market closed at 1:00 p.m. ET, rather than its usual closing time of 4:00 p.m., ahead of the Christmas Day and Boxing Day holidays.
Eight of 10 major sectors on the TSX ended higher. They included a gain of 0.8% for the energy sector as the price of oil increased 1.2% to $70.04 a barrel.
Gold and copper prices also edged up. The materials group, which includes metal mining shares, added 0.2%.
Technology was up 0.9% as BlackBerry Ltd added to its recent gains. Shares of the systems software company rose 4.1% to the highest level since December 2023.
On Wall Street, the main indexes all closed higher, with gains in megacap and growth stocks bolstering benchmarks in the truncated Christmas Eve session.
Both the Dow Jones Industrial Average and Nasdaq Composite scored four straight sessions of gains, with the S&P 500 taking its winning streak to three sessions, marking the first day of the seasonal Santa Claus rally.
The Dow had skidded for 10 straight sessions earlier this month, its longest losing streak since 1974.
All the so-called Magnificent Seven megacap technology stocks climbed on Tuesday, led by the 7.4% jump in Tesla shares.
The automaker’s best one-day gain in six weeks helped push the consumer discretionary index 2.6% higher. It was the top gaining sector in the S&P, with all 11 ending in positive territory.
Elsewhere, chip manufacturers were also buoyant. Broadcom and Nvidia rose 3.2% and 0.4%, respectively, while Arm Holdings climbed 3.9%, recouping most of the losses suffered the previous day from losing a court case.
Growth names rose despite U.S. Treasury interest rates remaining elevated - the benchmark 10-year note yielded around 4.61% on Tuesday, its highest level since May. Traditionally, higher debt costs crimp growth stocks.
However, the long-term themes around technology development, including advancements in artificial intelligence, overshadow any near-term moves in Treasuries, said Charlie Ripley, senior investment strategist for Allianz Investment Management.
“This reinforces that view that the sector is going to remain strong, and should be well into the new year,” he said.
The S&P 500 climbed 65.97 points, or 1.10%, to 6,040.04 points, while the Nasdaq Composite advanced 266.24 points, or 1.35%, to 20,031.13. The Dow Jones Industrial Average rose 390.08 points, or 0.91%, to 43,297.03.
U.S. markets will reopen on Thursday, but the TSX remains closed for the Boxing Day holiday.
After a stellar run to record highs following the November U.S. election, which sparked hopes of pro-business policies under President-elect Donald Trump, Wall Street’s rally hit a bump this month as investors grappled with the prospect of higher interest rates in 2025.
The Federal Reserve eased borrowing costs for the third time this year last Wednesday, but signaled only two more 25-basis-point reductions next year, down from its September projection of four cuts, as policymakers weigh the possibility of Trump’s policies stoking inflation.
Allianz’s Ripley said the themes which had driven the market higher in the past two months remained intact, and actions by the Fed had not killed the rally.
“Heading into 2025, things are set up with good positioning,” he said, noting factors including economic outlook, consumption in the U.S. and the labor market.
Crypto-related stocks traded higher on Tuesday, with Microstrategy, Riot Platforms, and MARA Holdings all climbing between 4.7% and 8.1%, as the price of bitcoin advanced.
NeueHealth soared 75% after the healthcare provider said New Enterprise Associates, its largest shareholder, and a group of existing investors will take the company private in a $1.3 billion deal.
American Airlines’ shares edged up 0.6% after trading lower for much of the session. The carrier briefly grounded all its flights in the United States on Tuesday due to an unspecified technical issue.
Reuters