Canada’s main stock index posted its largest gain in six months on Monday as a weaker U.S. dollar helped lift metal mining shares, with the index moving back in reach of the record closing high it posted in January.
The S&P/TSX Composite Index ended up 552.34 points, or 1.7%, at 33,023.32, its biggest advance since August 5.
U.S. benchmark the S&P 500 was also up, as technology stocks found their footing following last week’s AI-sparked selloff and investors waited for key economic data that could shed light on the Federal Reserve’s interest-rate path.
“It’s a risk-on day and markets are running with it,” said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth, adding that producers of U.S. dollar-denominated commodities were major drivers of the rally as the greenback lost ground.
The U.S. dollar fell 0.8% against a basket of major currencies following a report that Chinese regulators have advised financial institutions to curb their exposure to U.S. Treasury bonds.
That had the Canadian dollar rallying almost a full cent, reaching a 10-day high. Bullishness over the loonie also played a role. Speculative positioning has turned net-long the Canadian dollar for the first time since August 2023, data from the U.S. Commodity Futures Trading Commission showed on Friday. Non-commercial net-long positions stood at 2,130 contracts as of February 3, swinging from net-short 16,046 contracts in the week before.
The TSX materials group, which includes metal mining shares, rose 4.7%. Gold was up 2.3% and copper added 1.3%.
The price of oil also rose, settling 1.3% higher at US$64.36 a barrel, on renewed concerns that tensions between the U.S. and Iran could lead to oil supply disruptions. Energy was up 0.4%.
The heavily weighted financials group added 1.1%. Technology ended 2% higher with shares of e-commerce company Shopify Inc up nearly 5%.
Just two of 10 major TSX sectors ended lower, including utilities, which was down 0.3%.
On Wall Street, while the Dow notched its second closing record in a row with a small gain, the S&P 500 ultimately finished short of its closing record.
The S&P 500 technology sector finished up 1.6% to extend Friday’s gains after a steep selloff last week. The S&P 500 Software Services index ended up 2.9% as it clawed back some losses for a second day after a bruising seven days of losses fueled by fears that AI could intensify competition.
One big gainer in software was Oracle, which added 9.6% after D.A. Davidson upgraded it to a “buy” recommendation from “neutral.”
Along with the upgrade, Keith Lerner, chief investment officer at Truist Advisory Services, said another support for technology stocks came from comments CNBC attributed to Sam Altman, the CEO of Microsoft-backed OpenAI.
Altman told employees that the startup’s artificial intelligence chatbot, ChatGPT, was back to exceeding 10% monthly growth, according to CNBC’s report.
“You’ve a sharply oversold market where a little bit of good news can go a long way,” said Lerner, adding that “the rubber band was stretched too far for tech and software” in last week’s selloff.
While the software index was still almost 13% below its trading levels just before the exodus that started in late January, the broader tech sector was less than 3% under its pre-selloff levels.
After surpassing 50,000 points for the first time on Friday, the Dow Jones Industrial Average rose 20.20 points, or 0.04%, to 50,135.87. The S&P 500 gained 32.52 points, or 0.47%, to 6,964.82 and the Nasdaq Composite gained 207.46 points, or 0.90%, to 23,238.67.
The Nasdaq finished 3% below its latest record closing high, reached in November, while the S&P 500 was just out of reach of its last record close of 6978.60 reached on January 27.
The Philadelphia SE Semiconductor index gained 1.4%. Among its members, Nvidia shares added 2.5% providing the S&P 500’s biggest boost, but traders must wait until later this month for results from the AI chip leader.
Coming closer in the pipeline is the January U.S. nonfarm payrolls report due on Wednesday, which was delayed by a partial government shutdown, and the closely watched January Consumer Price Index on Friday.
Markets are currently pricing in the year’s first interest-rate cut in June, according to CME Group’s FedWatch tool, which could be when U.S. President Donald Trump’s nominee for Fed chair, Kevin Warsh, takes over.
Among individual U.S. stock movers, Hims & Hers Health tumbled 16% for its seventh consecutive daily loss. Novo Nordisk sued the telehealth firm for patent infringement after the U.S. firm launched, then canceled, a $49 copy of the Danish drugmaker’s weight-loss pill Wegovy following backlash from the U.S. Food and Drug Administration.
Workday shares slid 5% after the human resources software provider announced co-founder Aneel Bhusri will return as its CEO.
Kyndryl shares plunged 54.9% after the IT services provider delayed its quarterly filing and flagged material weakness in its financial reporting.
Kroger’s shares rallied 3.9% after the grocery giant named former Walmart executive Greg Foran as its chief executive.
Advancing issues outnumbered decliners by a 2.13-to-1 ratio on the NYSE where there were 789 new highs and 99 new lows. On the Nasdaq, 2,887 stocks rose and 1,917 fell as advancing issues outnumbered decliners by a 1.51-to-1 ratio.
The S&P 500 posted 63 new 52-week highs and 20 new lows while the Nasdaq Composite recorded 165 new highs and 127 new lows. Trading volume was relatively light on Monday with about 17.78 billion shares changing hands compared with the 20.66 billion moving average for the last 20 sessions.
Reuters, Globe staff