Canada’s main stock index notched another record high on Wednesday, led by sharp gains for metal mining shares as well as for the shares of Shopify after the e-commerce company delivered a strong outlook and market-beating quarterly results. The Dow also closed at a record although U.S. stocks were mixed, as investors digested further signs of progress for a peace deal with Iran.
The Toronto Stock Exchange’s S&P/TSX Composite index ended up 344.83 points, or 1%, at 36,146.42, surpassing Tuesday’s record closing high.
Shopify shares jumped 16.5% to the highest level since Jan. 19. The company issued a rosy third-quarter forecast as its AI efforts draw more merchants to a suite of e-commerce services, assuaging fears over growing competition.
The broader TSX technology index advanced 2.5%, while the materials group added 5.6%, marking its second straight day of sharp gains. The price of gold was up 4.2% to trade at its highest level in nearly seven weeks, bolstered by easing bond yields and positive chart signals.
Consumer discretionary rose 1.3% in Toronto and heavily weighted financials ended 0.4% higher.
Four of the 10 major sectors ended lower, including energy, which fell 3%. The price of oil settled 0.7% lower at US$75.22 a barrel on revived expectations of a de-escalation in Iran war hostilities that could restore shipping traffic in the Strait of Hormuz. A proposed deal between Iran and Oman would give Tehran control over ships entering the Gulf through the Strait of Hormuz, a senior Iranian source and two regional officials told Reuters, in one of the biggest concessions yet to Iran.
Suncor Energy beat second-quarter adjusted profit estimates as higher crude price realizations and stronger refining margins offset weaker upstream production. Still, its shares ended 2.9% lower.
Thomson Reuters lifted its full-year revenue forecast, with CEO Steve Hasker saying that the company’s focus was on investing and developing AI across its portfolio. Its shares were down 10.2%, pulling back from an earlier six-month high.
Stocks rallied to start the week, with the Dow and S&P 500 also closing at records on Tuesday. The S&P 500 recorded a slight decline on Wednesday.
The Dow Jones Industrial Average rose 263.18 points, or 0.49%, to 54,349.06, the S&P 500 lost 13.00 points, or 0.17%, to 7,723.52 and the Nasdaq Composite lost 221.55 points, or 0.83%, to 26,363.44.
Elon Musk-led SpaceX’s revenue nearly doubled and operating losses narrowed in its first earnings report since going public, fueled by its booming Starlink satellite communications and AI businesses, but shares tumbled 13.6% on concerns about how long the company could maintain spending on AI-related investments such as data centers. Shares could face additional pressure from the expiry of the stock’s post-IPO lock-up period starting on Thursday.
Advanced Micro Devices forecast quarterly revenue above estimates, reflecting strong AI demand. However, shares dropped 7% as investors look for greater evidence the massive AI spending will result in faster growth.
A 4.6% gain in Amgen helped buoy the Dow, providing more than 100 points to the upside for the average, as second-quarter sales for the drugmaker rose 9%. Rival Eli Lilly jumped 4.9% after raising its full-year revenue forecast and the S&P 500 healthcare closed up 1.3%, one of the best-performing sectors on the session.
Also helping to boost the Dow was a 3.6% rise in Disney shares after beating third-quarter profit expectations.
On the data front, U.S. private payrolls growth slowed in July, as per the ADP national employment report. The data was the second in a string of reports on the labor market this week before Friday’s government payrolls report. Separately, the Institute for Supply Management said its non-manufacturing purchasing managers index inched up to 54.1 last month from 54.0 in June, below the 54.5 estimate of economists polled by Reuters but above the 50 threshold that signals growth.
Data has largely reflected a stable labor market, but the war with Iran that began at the end of February has kept concerns about price pressures and the Fed’s response to it as a primary concern among investors. Minneapolis Fed President Neel Kashkari said in an interview with CNBC that he believed now is the time to start slowly moving interest rates higher. Federal Reserve Board Governor Lisa Cook and San Francisco Fed President Mary Daly are scheduled to speak later in the day. Expectations for a rate hike from the central bank at its September meeting have dipped to 54.9%, according to CME FedWatch, down from 58.3% a week ago.
Declining issues outnumbered advancers by a 1.15-to-1 ratio on the NYSE and by a 1.34-to-1 ratio on the Nasdaq. The S&P 500 posted 34 new 52-week highs and three new lows while the Nasdaq Composite recorded 107 new highs and 75 new lows. Volume on U.S. exchanges was 17.85 billion shares, compared with the 17.34 billion average for the full session over the last 20 trading days.
Reuters, Globe staff