Canada’s main stock index rose to a record high on Thursday as stronger-than-expected bank earnings boosted financial shares and investors bet on an improving economic outlook next year.
The S&P/TSX Composite index ended up 317.03 points, or 1 per cent, at 31,477.57, eclipsing the record closing high it posted last Friday.
“The glass half-full interpretation is markets are forward-looking,” said Brian Madden, chief investment officer at First Avenue Investment Counsel. “The fact that markets are strong is probably discounting an improving economic backdrop going into 2026.”
Canada’s economy has been held back this year by trade uncertainty. Still, it grew much more than expected in the third quarter and could get a lift from increased fiscal spending.
Canadian Prime Minister Mark Carney has committed billions of dollars to fight U.S. tariffs, boost defense spending and diversify trade.
Canadian lenders TD Bank, Bank of Montreal and CIBC topped analyst estimates for fourth-quarter profit, boosted by their capital markets businesses that benefited from a rebound in dealmaking and higher trading revenue.
Shares of CIBC and TD rose 4.1 per cent and 2 per cent respectively to record highs, while BMO’s shares ended 0.1 per cent lower.
The other three big-six banks - Royal Bank of Canada Scotiabank and National Bank of Canada - reported earlier in the week and they too beat estimates.
Energy added 0.3 per cent as the price of oil settled 1.2 per cent higher at $59.67 a barrel. Investors’ expectations for the Federal Reserve to cut interest rates and stalled Ukraine peace talks helped underpin oil prices.
Logistics software firm Descartes Systems Group Inc was a standout. Its shares jumped 14.4 per cent after the company’s third-quarter revenue beat estimates.
The technology sector was up 2.7 per cent and consumer staples added 1.3 per cent.
U.S. stocks closed near the unchanged mark on Thursday, as investors weighed a report on the labor market and other economic data, while equities drew support from elevated hopes for a Federal Reserve interest-rate cut next week.
A drop in Amazon.com shares weighed on the S&P 500, limiting its advance.
With the November payrolls report scheduled for after the Fed’s December meeting due to the extended government shutdown, market participants have looked to secondary indicators that have given a mixed view of the labor market as the backlog of government data slowly gets unwound.
A Labor Department report showed initial jobless claims dropped to their lowest level in more than three years, although analysts suggested the drop could have been in part due to the Thanksgiving holiday.
A separate report from the Chicago Fed estimated the unemployment rate held near 4.4 per cent in November.
Markets are pricing in an 87 per cent chance the central bank will cut rates by 25 basis points this month, up from a 68.6 per cent chance priced in a month ago, according to CME’s FedWatch Tool.
“Everybody’s waiting around to see what the Fed thinks with any of this data that they’ve seen come in because the last comments from (Fed Chair Jerome) Powell were a little bit on the hawkish side, but cuts are fully expected,” said Mike Dickson, head of research and quantitative strategies at Horizon Investments in Charlotte, North Carolina.
“The short of it is the gold standard is payrolls, and we just don’t have an updated figure there, so that’s going to really move the needle one way or the other on any future rate policy paths.”
According to preliminary data, the S&P 500 gained 7.20 points, or 0.11 per cent, to end at 6,856.92 points, while the Nasdaq Composite gained 54.78 points, or 0.23 per cent, to 23,508.87. The Dow Jones Industrial Average fell 32.48 points, or 0.07 per cent, to 47,850.42.
A delayed report from the Commerce Department showed factory orders rose 0.2 per cent, short of the 0.5 per cent estimate, after a downwardly revised 1.3 per cent increase in August as tariffs hemmed in manufacturers.
Dow component Salesforce climbed after the company raised its fiscal 2026 revenue and adjusted profit forecasts, anticipating growth in its artificial intelligence agent platform due to strong enterprise demand.
Also on the plus side, Meta Platforms rose as one of the biggest boosts to the S&P after a Bloomberg report said the Facebook parent planned cuts of up to 30 per cent of its Metaverse budget.
Meanwhile, Amazon dipped as one of the biggest drags to the benchmark S&P index after the e-commerce company said it was in discussions with the U.S. Postal Service about their future relationship and is considering its options before its contract expires next year.
The consumer staples index fell as one of the worst performing of the 11 major S&P sectors, pressured by a drop in Kroger after the supermarket chain narrowed its annual sales forecast and missed quarterly sales estimates. In contrast, Dollar General surged after the discount retailer raised its annual profit forecast.
Snowflake tumbled after the cloud data analytics company’s fourth-quarter product revenue forecast was below lofty investor expectations for stronger growth.
Hormel Foods advanced after the Skippy peanut butter maker forecast annual profit above estimates.
Reuters