Canada’s main stock index rose on Thursday, with the index moving closer to the record closing high it posted nearly three months ago as financial and consumer discretionary shares climbed.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 247.67 points, or 0.7%, at 34,409.49, marking the highest closing level since the index notched an all-time peak on March 2.
Wall Street’s main indexes clawed back some earlier declines to end higher as investors hoped for a Middle East peace deal even as the U.S. and Iran took directly opposing stances over Tehran’s uranium stockpile and controls on the Strait of Hormuz.
“Until there’s a resolution, markets are likely to continue tracking headlines around the conflict,” said Corbin Footitt, a portfolio manager at Verecan Capital Management Inc. “But we’re still holding our course because Canada remains the cleanest commodity play in the Western world.”
Heavily weighted financials advanced 1.1%, with shares of Bank of Montreal adding 1.5%. Canada’s major banks are due to report quarterly earnings next week.
Shares of auto parts supplier Magna International Inc. gained 4.1%, helping to lift the consumer discretionary sector by 1.6%.
Utilities added 1.2% as bond yields fell. The Canadian 10-year yield eased 4.1 basis points to 3.550%.
Energy dipped 0.1% as the price of oil settled 1.9% lower at US$96.35 a barrel, but the sector was up 46.1% since the start of the year.
Lightspeed Commerce Inc. shares fell 6.6% after the point of sale platform provider missed quarterly profit estimates.
The Dow Jones Industrial Average rose 276.31 points, or 0.55%, to 50,285.66, marking a record closing high. The S&P 500 gained 12.75 points, or 0.17%, to 7,445.72 and the Nasdaq Composite gained 22.74 points, or 0.09%, to 26,293.10.
While U.S. Secretary of State Marco Rubio told reporters there had been “some good signs” in talks with Iran, he also said a diplomatic deal between the U.S. and Iran would be unfeasible if Tehran implemented a tolling system in the Strait of Hormuz, which is a key conduit for oil transportation. A senior Iranian source told Reuters that no deal has been reached with the U.S., but that gaps have been narrowed while Iran’s uranium enrichment and Tehran’s control over the strait remained among the sticking points.
“The silver lining is that from a market perspective, the fragile ceasefire is still holding. It’s positive there’s still, according to news reports, the possibility of an off-ramp. Oil and market sentiment is very sensitive to every headline,” said Marc Dizard, chief investment officer at Huntington Wealth Management.
He added, however: “Nobody knows, except the inner circle in Iran and in the U.S., how much progress is truly being made.”
Investors also reacted to the latest batch of earnings from big U.S. companies. Walmart shares tumbled 7.3% after the largest global retailer forecast second-quarter profit below estimates and maintained its annual targets. CFO John David Rainey said consumers were feeling pressure from high fuel prices and that if the “elevated cost environment persists, we’d expect somewhat higher retail price inflation in Q2 and the second half of the year.”
Among the S&P 500’s 11 major industry sectors, consumer staples led losses with a 1.6% decline as it was weighed down by Walmart along with declines in some other retailers that fell in sympathy, including Casey’s General Stores, down 3.3%, and Costco Wholesale, which finished down 2.2%.
Shares of Nvidia, the world’s most valuable company, fell 1.8% as some investors took profits after the AI heavyweight’s upbeat second-quarter revenue forecast and $80 billion share-repurchase program. Its stock has gained sharply so far this year but the pace of growth has slowed as investors believe Nvidia will face tougher competition from chip rivals including Intel and Advanced Micro Devices going forward. However, the Philadelphia Semiconductor Index finished up 1.3% as investors viewed Nvidia’s results as a positive sign for the group.
In U.S. economic data, jobless claims fell last week, pointing to continued labor market resilience, giving the U.S. Federal Reserve room to keep its focus on inflation risks. U.S. manufacturing activity rose to a four-year high in May as businesses built inventories to guard against potential shortages and rising prices tied to the Iran war.
Among other movers, IBM rose 12.4% on news that the Trump administration will fund a handful of quantum computing companies, including a new IBM venture, in exchange for stakes in some of the firms.
GlobalFoundries also climbed 14.9% while D-Wave Quantum added 33.4%, Rigetti Computing jumped 30.6% and Infleqtion gained 31.5%. Intuit’s shares plunged 20% after the software maker lowered the annual revenue forecast for its tax-filing software, TurboTax, and said it would cut 17% of its full-time workforce. Shares of tax preparer H&R Block ended down 4.8%.
Advancing issues outnumbered decliners by a 1.51-to-1 ratio on the NYSE, where there were 234 new highs and 106 new lows. On the Nasdaq, 2,985 stocks rose and 1,798 fell as advancing issues outnumbered decliners by a 1.66-to-1 ratio. The S&P 500 posted 11 new 52-week highs and four new lows while the Nasdaq Composite recorded 96 new highs and 108 new lows.
On U.S. exchanges, 17.67 billion shares changed hands compared with the 18.57 billion moving average for the last 20 sessions.
Reuters, Globe staff