Canada’s main stock index rose to another record high on Wednesday, as technology and metal mining shares notched gains ahead of employment data this week that could offer clues on the prospect of a Bank of Canada interest rate cut.
The S&P/TSX composite index ended up 135.74 points, or 0.5%, at 28,751.36, surpassing Tuesday’s record closing high.
Both Canada and the U.S. are due to release employment reports for August on Friday. Economists forecast that Canada’s economy added 10,000 jobs and the unemployment rate edged up to 7% from 6.9%.
“It is probably the biggest jobs number we’ve seen in recent times coming out of both sides of the border,” said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth. “I think a bad number in Canada solidifies a cut here.”
Investors see a roughly 60% chance the BoC lowers interest rates on September 17 for the first time since March. The benchmark rate is at 2.75%.
“Gold reaching all-time highs, that’s what’s carrying the TSX right now,” Small said.
The materials group, which includes metal mining shares, added 0.8% as the price of gold climbed to another all-time peak.
Teck Resources announced that it has undertaken a company-wide operations review and would defer approving major growth projects until its Quebrada Blanca copper mine in Chile achieves steady operations and target output. Shares of Teck ended 0.7% higher.
Technology was up 1.4% and consumer staples added 2%.
Alimentation Couche-Tard climbed 6.3% after its quarterly adjusted earnings beat estimates. Energy was a drag, falling 1.7%. The price of oil settled 2.5% lower at $63.97 a barrel ahead of a weekend meeting of OPEC+ producers that is expected to consider another increase in production targets in October.
On Wall Street, the Nasdaq rose 1% and the S&P 500 also ended higher as Alphabet jumped after a U.S. judge ruled against breaking up the Google parent and as investors were optimistic that the Federal Reserve would cut interest rates this month.
The Dow finished slightly lower, with shares of Boeing down 2.1%.
Alphabet and Apple gave the S&P 500 and Nasdaq their biggest boosts. Shares of Alphabet rose 9.1% after the late Tuesday ruling, which allows Google to retain control of its Chrome browser and Android mobile operating system, while barring certain exclusive contracts with device makers and browser developers.
Shares of Apple gained 3.8% as the ruling also preserved lucrative payments to the iPhone maker from Google.
“Google and Apple got a lifeline ... They won the sweepstakes,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. “The courts just cemented their reputation.”
Several Fed officials said labor market concerns continue to animate their belief that rate cuts lie ahead. Fed Governor Christopher Waller said he thinks the central bank should be cutting at its next meeting. Atlanta Fed President Raphael Bostic reiterated his view that a rate cut is in the cards, although he did not say how soon it might happen.
Data earlier showed U.S. job openings fell in July, suggesting a softening labor market.
The Dow Jones Industrial Average fell 24.58 points, or 0.05%, to 45,271.23, the S&P 500 gained 32.72 points, or 0.51%, to 6,448.26 and the Nasdaq Composite gained 218.10 points, or 1.03%, to 21,497.73.
September is historically a weak month for the stock market. But Peter Cardillo, chief market economist at Spartan Capital Securities in New York, said he did not think the month would be “as trying as it usually is because of the fact that the Fed is expected to lower rates.”
U.S. rate futures now widely expect the Fed to lower rates this month, pricing in a 96% chance of a 25 basis point cut at the end of the two-day Fed policy meeting on September 17, according to the CME Group’s FedWatch tool.
Shares of Macy’s jumped 20.7% after the company raised its annual forecasts. On the flip side, discount retailer Dollar Tree shares fell 8.4% after the company forecast current-quarter profit below estimates, with tariffs seen driving up costs for the retailer.
With the second-quarter U.S. earnings season now at its end, investors are paying close attention to estimates for third-quarter results and possible impacts from President Donald Trump’s tariff war.
Advancing issues outnumbered decliners by a 1.33-to-1 ratio on the NYSE. There were 224 new highs and 45 new lows on the NYSE.
On the Nasdaq, 2,259 stocks rose and 2,337 fell as declining issues outnumbered advancers by a 1.03-to-1 ratio.
Volume on U.S. exchanges was 14.95 billion shares, compared with the 16.18 billion average for the full session over the last 20 trading days.
Reuters, Globe staff