Canada’s main stock index rose on Thursday, led by technology and metal mining shares, as the prospect of a ceasefire extension in the Iran war boosted investor sentiment.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 105.65 points, or 0.3 per cent, at 34,517.70.
The S&P 500 and the Nasdaq posted record closing highs after news reports said the U.S. and Iran had reached a draft agreement to extend their ceasefire for 60 days, while investors also digested key inflation data.
“Today, we are seeing the TSX really being driven less by individual stock stories and more by macro economics,” said Robert Gill, a portfolio manager at Fairbank Investment Management.
The technology sector rallied 2.6 per cent, with shares of e-commerce company Shopify Inc up 7.4 per cent.
The materials group which includes metal mining shares, added 1.9 per cent as gold prices climbed.
Canadian lenders Royal Bank of Canada, TD Bank and CIBC beat second-quarter profit estimates, helped by strong domestic growth and bucking concerns arising from trade uncertainty and the impact of Middle East conflicts on the economy.
Shares of TD rose 0.7 per cent but RBC was down 0.4 per cent and CIBC ended 5.4 per cent lower.
“You are seeing a bit of valuation discipline returning in certain segments of the market,” Gill said. “Strong gains to the recent highs are resulting in profit taking in some of the banks, some of the financials and even in some of the commodity names.”
Energy fell 0.5 per cent, extending its pullback from an 18-year high reached last week. The price of oil settled 0.25 per cent higher at US$88.90 a barrel.
Shares of ATS Corp were down 14.3 per cent after the automation solutions provider missed estimates for quarterly earnings.
The S&P 500 and the Nasdaq posted record closing highs on Thursday after news reports said the U.S. and Iran had reached a draft agreement to extend their ceasefire for 60 days, while investors also digested key inflation data.
The Dow Jones Industrial Average, which was subdued during the session, eked out small gains in afternoon trade to finish at another closing high.
The agreement still needs U.S. President Donald Trump’s approval, sources told Reuters. Iran’s Tasnim news agency, meanwhile, said the text of a potential memorandum of understanding with the U.S. has not yet been finalized or confirmed.
“Traders are on a hair trigger with the back-and-forth on deal news, and have been leaning long to avoid getting trampled by a better-than-expected outcome. The harder part is that the inflationary forces may not abate as fast as markets want,” said Jamie Cox, managing partner at Harris Financial Group.
Economic data showed U.S. inflation increased at its fastest pace in three years in April, driven by higher energy prices amid the Iran war. Meanwhile, U.S. GDP for the first quarter was revised lower to a 1.6 per cent annualized increase, with momentum expected to slow this quarter.
The Dow Jones Industrial Average rose 24.69 points, or 0.05 per cent, to 50,668.97, the S&P 500 gained 43.27 points, or 0.58 per cent, to 7,563.63 and the Nasdaq Composite gained 242.74 points, or 0.91 per cent, to 26,917.47.
The S&P 500 healthcare index posted strong gains. Eli Lilly advanced 4 per cent after CVS Health said it would restore the drugmaker’s weight-loss injection, Zepbound, to its coverage and add its newly approved obesity pill Foundayo.
Tech shares also moved higher. Microsoft gained 3.5 per cent after news website the Information reported that the company would release a new coding model next week.
Marvell Technology rose 3 per cent after UBS raised its target price to US$230 from US$195.
The company’s shares have more than doubled so far this year. Snowflake shares soared 36 per cent after the data analytics firm lifted its annual product revenue forecast and announced a five-year AI infrastructure deal worth US$6 billion with Amazon Web Services.
Peers Datadog and MongoDB also climbed.
Renewed confidence in AI and earnings growth momentum have underscored the recent rally despite the Middle East tensions, which have increased inflationary expectations.
“Markets continue to look through these risks because the global economy and corporate earnings remain relatively resilient,” said Jitania Kandhari, deputy CIO, solutions and multi-assets, at Morgan Stanley Investment Management.
“Geopolitical instability could ultimately accelerate spending in areas tied to AI, including cybersecurity, defense technology, energy infrastructure and supply-chain resiliency, reinforcing the long-term investment case.”
While the S&P 500 is trading at roughly 21 to 22 times forward earnings versus a trailing 10-year average of 19.7 times, investors are less concerned because earnings expectations are rising faster than stock prices, Kandhari said.
Among other movers, Dollar Tree climbed almost 18 per cent after the discount retailer lifted its full-year profit forecast, while Best Buy also rose 15.8 per cent after the electronics vendor forecast second-quarter sales above estimates.
Drone companies rose after the Wall Street Journal reported that the Trump administration was in talks to fund drone firms. Shares of Unusual Machines surged almost 11 per cent.
Advancing issues outnumbered decliners by a 1.74-to-1 ratio on the New York Stock Exchange. There were 526 new highs and 99 new lows on the NYSE.
On the Nasdaq, 3,114 stocks rose and 1,728 fell as advancing issues outnumbered decliners by a 1.8-to-1 ratio.
The S&P 500 posted 18 new 52-week highs and 10 new lows while the Nasdaq Composite recorded 127 new highs and 65 new lows.
Volume on U.S. exchanges was 19.2 billion shares, compared with the 19.03 billion average for the full session over the last 20 trading days.
Reuters