Canada’s main stock index rose on Thursday, led by technology and real estate shares, as investors took in their stride the latest U.S. tariff threats and additional evidence that U.S. inflation was picking up again.
The S&P/TSX composite index ended up 135.40 points, or 0.5%, at 25,698.51, moving back in reach of the record-high close it posted in January.
“Equity markets are up today, climbing a wall of worry as they deal with sticky inflation, tariff concerns, and generally weak investor sentiment,” said Brandon Michael, senior investment analyst at ABC Funds.
“This morning’s hotter-than-expected PPI (producer price index) initially weighed on stocks, but as the day progressed the market rallied back, indicating exhausting selling pressure and expectations of sticky inflation already being priced in.”
U.S. producer prices increased solidly in January, strengthening financial market views that the Federal Reserve would not be cutting interest rates before the second half of the year.
U.S. President Donald Trump unveiled a roadmap for charging reciprocal tariffs on every country that puts duties on U.S. imports.
As the threat of a trade war grows, Canadian investors are seeking protection in gold and in shares of companies producing goods with few substitutes, such as uranium, while looking to take advantage of a weaker loonie and expected volatility.
“Despite the volatility, the market is now within striking distance of new all-time highs, fueled by solid economic data and stronger-than-expected corporate earnings,” Michael said.
Telus Corp shares added 3.7% after the communications technology company’s fourth-quarter revenue beat market expectations.
The technology sector was up 1.9%, while real estate added 1% as bond yields fell. The Canadian 10-year yield was down 6.6 basis points at 3.113%.
Shares of Sun Life Financial were a drag, falling 7.3%, after Canada’s second-largest life insurer missed fourth-quarter profits expectations.
The S&P 500 ended higher on Thursday, lifted by gains in Nvidia, Apple and Tesla, after U.S. President Donald Trump unveiled a roadmap for charging reciprocal tariffs on U.S. trading partners.
A White House official said the tariffs would match the higher duties charged by other countries and could be imposed within weeks as Trump’s trade and economic team studies bilateral tariff and trade relationships.
Stocks also gained after data showed U.S. producer prices increased in January, while key elements in the core Personal Consumption Expenditures (PCE) index, a measure closely tracked by the U.S. Federal Reserve, were benign or lower.
Components, including physician’s office and hospital prices, were either broadly unchanged or rose modestly. Healthcare, with a nearly 20% weighting in the core PCE, declined 0.06%.
Yields on the 10-year U.S. Treasury bond moved sharply lower following the report, suggesting investors were growing more confident about inflation cooling.
Tesla jumped 5.9%, Nvidia climbed 3.2% and Apple rose 2%, lifting the S&P 500 to just short of its record high close on January 23.
“Equity investors are taking cues from the bond market,” said Jack Ablin, chief investment officer at Cresset Capital. “Investors were also preparing for kind of an alarmingly high inflation number, based on tariffs.”
The S&P 500 climbed 1.04% to end the session at 6,115.07 points. It was the S&P 500′s largest one-day gain since January 15.
The Nasdaq gained 1.50% to 19,945.64 points, while the Dow Jones Industrial Average rose 0.77% to 44,711.43 points.
Volume on U.S. exchanges was relatively heavy, with 15.3 billion shares traded, compared to an average of 15.0 billion shares over the previous 20 sessions.
All 11 S&P 500 sector indexes rose, led by materials , up 1.71%, followed by a 1.6% gain in consumer discretionary.
Interest rate futures suggest traders expect a single 25-basis-point rate cut from the central bank by the end of 2025, according to the CME’s FedWatch Tool.
The number of Americans filing new applications for unemployment benefits decreased last week, another report showed.
Chevron shares rose 0.6% after the oil heavyweight said it will lay off up to 20% of its global workforce by the end of 2026.
Trade Desk slumped 33% after the ad tech firm forecast first-quarter revenue below analysts’ estimates.
MGM Resorts International jumped 17% after the casino operator beat fourth-quarter profit and revenue estimates.
Advancing issues outnumbered falling ones within the S&P 500 by a 3.7-to-one ratio.
The S&P 500 posted 36 new highs and 11 new lows; the Nasdaq recorded 124 new highs and 105 new lows.
Reuters