Canada’s main stock index edged up to a new record high on Wednesday, helped by gains in resource and consumer discretionary shares, as investors continued to look past global economic uncertainty and weighed prospects for Federal Reserve interest rate cuts. The S&P 500 and Nasdaq also closed at record highs, helped by news of a trade agreement between the U.S. and Vietnam.
The S&P/TSX composite index ended up 12.55 points, or 0.1%, at 26,869.66, eclipsing the record closing high it posted on Monday, before the Canada Day holiday.
“The market continues to climb the wall of worry,” said Greg Taylor, CFA, chief investment officer at PenderFund Capital Management Ltd. “There is a lot of fear out there but I think that kept a lot of people out of the market.”
Markets opened lower after a non-key indicator showed U.S. private payrolls fell unexpectedly in June and job gains in the prior month were smaller than initially thought.
But they reversed course before lunch time as the U.S. and Vietnam struck a trade agreement that sets 20% tariffs on many of the Southeast Asian country’s exports.
The Trump administration has teased that a deal with India is also coming soon, but has said others may not be ready by July 9.
“There is some relief in regards to progress on trade. The deal with Vietnam was welcomed news,” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
Domestic data, meanwhile, showed signs of trade uncertainty hurting the economy. The S&P Global Canada Manufacturing Purchasing Managers’ Index edged down to 45.6 in June from 46.1 in May.
Investors will now look ahead to the U.S. non-farm payrolls report on Thursday for clues on how soon the Federal Reserve could lower borrowing costs.
A weakening economy “is a very mixed bag”, said Jim Awad, senior managing director at Clearstead Advisors LLC in New York.
“Employment softening and inducing the Fed to lower rates would be a positive,” he said. “But if it softens too much, that would be a negative for growth and profits.”
Trump’s massive tax-and-spending bill headed to the U.S. House of Representatives for possible final approval after the Senate passed the legislation. Nonpartisan analysts say it will add $3.4 trillion to the national debt over the next decade.
In Toronto, the energy sector rose 1.4% as the price of oil settled 3.1% higher US$67.45 a barrel.
Gold also rose, which helped lift metal mining shares. The materials group was up 1%.
Consumer discretionary added 2.4%, helped by a gain of 7.8% for the shares of autoparts manufacturer Magna International Inc .
Bombardier Inc was another standout, with its shares jumping 21.4%. The company said on Monday it had secured an order for 50 Challenger and Global aircraft.
Consumer staples on the TSX was a drag, falling 1.5% and technology ended 0.5% lower.
The S&P 500 gained 29.41 points, or 0.47%, to 6,227.42 and the Nasdaq Composite gained 190.24 points, or 0.94%, to 20,393.13. The Dow fell 10.52 points, or 0.02%, to 44,484.42; it is 1.18% below its December 4 record close.
Tesla rose 5%, bouncing after a drop early this week, even as the electric vehicle maker posted a big drop in second-quarter deliveries. Some traders said the numbers were less severe than analysts’ bleak forecasts. The stock has shed more than 20% this year.
Centene tumbled 40% to the lowest level in eight years after the health insurer said it had withdrawn its 2025 earnings forecast after data showed a significant drop in expected revenue from its marketplace health insurance plans.
There were 358 new highs and 41 new lows on the New York Stock Exchange.
Reuters, Globe staff