The S&P 500 and S&P/TSX Composite Index both notched record-high closes on Thursday, fueled by advances in technology stocks, as tame U.S. producer price inflation data supported expectations the Federal Reserve will not raise interest rates at its September meeting.
Fresh data showed U.S. producer prices were unchanged in July as goods prices fell and the cost of services increased marginally, while the number of Americans filing claims for unemployment benefits increased moderately last week, pointing to a stable jobs market.
Traders are pricing in a 63 per cent chance that the Fed will keep interest rates unchanged at its meeting next month, according to CME’s FedWatch tool.
Easing concerns about inflation pushed bond yields lower in both the U.S. and Canada. In afternoon trading, U.S. two-year yields, which are sensitive to the outlook for interest rate moves, fell to their lowest since mid-July. The benchmark 10-year yield slid 5.3 basis points to 4.639 per cent
Among U.S. stocks, memory chip makers Sandisk and Micron Technology surged 13.7 per cent and 4.2 per cent, respectively, while Microsoft added almost 1 per cent and Meta Platforms rose 2.8 per cent.
Strong forecasts in recent weeks from companies including Microsoft and Amazon have reduced investors’ concerns about massive spending on AI data centers.
“The AI earnings-driven tech boom continues,” said Jay Hatfield, CEO of Infrastructure Capital Advisors in New York. “It’s an earnings boom, not a bubble.”
The S&P 500 climbed 0.65 per cent to end the session at 7,798.99 points, exceeding its record high close last Friday.
The Nasdaq gained 0.81 per cent to 26,803.03 points, while the Dow Jones Industrial Average rose 0.13 per cent to 53,839.99 points.
Canada’s main stock index ended up 97.15 points, or 0.3 per cent, at 36,759.29, surpassing Wednesday’s record closing high. It was the fifth straight day of gains for the index, marking the longest daily winning streak since April.
“It’s undeniable that Canada has lots of potential and upside,” said Victor Kuntzevitsky, a portfolio manager at Stonehaven, Wellington-Altus Private Counsel. “So, generally we are very excited about Canadian equity allocations and the economy as a whole.”
Recent strong jobs data has added to evidence of a rebound in Canada’s economy after it was held back by trade uncertainty at the start of the year.
A Canadian government source directly familiar with trade negotiations with the United States told Reuters that talks were progressing well and Washington also wanted an agreement before a new U.S. tariff deadline on August 19.
“What’s been working really well for Canada are the things that the world wants from us,” Kuntzevitsky said. “That’s energy, that’s metals, materials. Our financial industry has been doing remarkably well and has a lot of potential to implement the cost savings of AI.”
Heavily weighted financials added 0.5 per cent, while technology was up 3.1 per cent and energy ended 0.8 per cent higher.
The price of U.S. oil settled 2.4 per cent lower at US$81.25 a barrel, reversing course after a week of gains. Iran and the United States remain at loggerheads over efforts to agree on a permanent end to the Iran war, according to a senior Iranian source, while traffic through the vital Strait of Hormuz remained severely curtailed.
Bird Construction was a standout in Toronto. Its shares rose 11.4 per cent after the company’s quarterly profit beat estimates.
Just two of the 10 major TSX sectors ended lower, including materials, which includes metal mining shares. It was down 2.2 per cent as the price of gold pulled back from a two-month high.
Pan American Silver shed 9.8 per cent after the miner missed quarterly adjusted profit estimates on lower gold output.
On Wall Street, seven of the 11 S&P 500 sector indexes rose, led by communication services, up 1.56 per cent, followed by a 1.34 per cent gain in real estate.
The S&P 500 is up about 14 per cent in 2026, while the Nasdaq has gained about 15 per cent.
Cisco Systems dropped 8.4 per cent after the networking equipment maker’s upbeat revenue forecast did not satisfy investors with high expectations.
Netflix climbed 5.4 per cent after billionaire investor Bill Ackman unveiled a new holding in the streaming company as part of Pershing Square’s biggest portfolio overhaul in years. Tapestry shares plunged more than 16 per cent after the Coach owner forecast muted annual revenue growth. Dell Technologies rose 2.1 per cent and HP added 6.9 per cent after quarterly results from China’s Lenovo beat expectations.
Advancing issues outnumbered falling ones within the S&P 500 by a 1.7-to-one ratio.
The S&P 500 posted 30 new highs and one new low; the Nasdaq recorded 155 new highs and 85 new lows.
Volume on U.S. exchanges was light, with 16.1 billion shares traded, compared to an average of 17.5 billion shares over the previous 20 sessions.
Reuters, Globe staff