Canada’s main stock index rose on Thursday as a sharp increase in the price of oil boosted energy shares. Wall Street also advanced, as investors mulled a mixed batch of corporate earnings and shifting geopolitical concerns.
The S&P/TSX composite index ended up 203.30 points, or 0.6%, at 30,186.28, extending its recovery from an 11-day low on Tuesday.
The energy sector advanced 2%, with shares of Cenovus Energy adding 3.1%. The price of oil settled 5.6% higher at US$61.79 a barrel after the U.S. imposed sanctions on major Russian suppliers.
“The announcement of sanctions by the U.S. on Rosneft and Lukoil is a major escalation in the targeting of Russia’s energy sector and could be a big enough shock to flip the global oil market into a deficit next year,” said David Oxley, chief climate and commodities economist at Capital Economics.
Russia was the world’s second-biggest crude oil producer in 2024 after the U.S., according to U.S. energy data. The U.S. sanctions mean refineries in China and India, major buyers of Russian oil, will need to seek alternative suppliers to avoid exclusion from the Western banking system, said Saxo Bank analyst Ole Hansen.
In domestic economic news Thursday, Canadian retail sales grew by 1% in August, matching expectations, as consumers spent more on new cars, at supermarkets and on clothing. An advance estimate for September was less upbeat, showing a decline of 0.7%.
Investors are betting that a sluggish economy will prompt the Bank of Canada to ease interest rates further at a policy decision next Wednesday. Last month, the central bank lowered its benchmark rate to a three-year low of 2.50%.
Renewed political risk bolstered safe-haven demand for gold on Thursday. The precious metal was up 0.6%, while the materials group, which includes metal mining shares, gained 1%.
Financials rose 0.5% and technology ended 2.1% higher.
On Wall Street, all three major U.S. stock indexes closed higher, with tech strength nudging the Nasdaq into the lead. But the small-cap Russell 2000 was the clear outperformer. The indexes gained some momentum after the White House confirmed U.S. President Donald Trump will meet Chinese President Xi Jinping next week as part of his trip through Asia.
Trade tensions between Washington and Beijing have been escalating in recent days, marked by tit-for-tat retaliatory measures announced by both sides. Confirmation that the two leaders would meet next week appeared to ease those tensions.
“The Trump-Xi confirmation is clearly positive,” said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina. “That’s a good checkpoint for sentiment, which has been really up-and-down on trade and that’s obviously playing a role today.”
“Additionally, earnings have been really strong in general,” Hill added. “And that’s supporting the market from a fundamental perspective.”
The Dow Jones Industrial Average rose 144.20 points, or 0.31%, to 46,734.61, the S&P 500 gained 39.03 points, or 0.58%, to 6,738.43 and the Nasdaq Composite gained 201.40 points, or 0.89%, to 22,941.80.
Third-quarter reporting season has hit full stride.
Tesla shares rebounded, gaining 2.3% following its third-quarter profit miss. The electric-vehicle maker was the first of the “Magnificent Seven” group of megacap momentum stocks that account for more than a third of the S&P 500’s market cap.
IBM dropped 0.9% after reporting a slowdown in its key cloud software segment, eclipsing its earnings beat. So far, just over a quarter of the companies in the S&P 500 have reported third-quarter results. Of those, 86% have beaten consensus expectations, according to LSEG data.
In aggregate, analysts currently expect S&P 500 third-quarter earnings growth of 9.9% year-on-year, up from their 8.8% growth estimate as of October 1, per LSEG.
In other earnings, health insurer Molina Healthcare plunged 17.5% after slashing its annual profit forecast.
Honeywell raised its annual profit forecast on strong aerospace demand, sending its shares up 6.8%.
American Airlines shares advanced 5.6% after the carrier raised its annual profit forecast, while Southwest Airlines slipped 6.3% despite posting a surprise quarterly profit and record current-quarter sales.
T-Mobile dipped 3.3% even after the telecom’s wireless subscriber adds surpassed analyst expectations.
Dow reported a smaller-than-expected quarterly loss as cost cuts and higher volumes helped offset weakness in chemical prices. Its stock jumped 13.0%.
Quantum computing firms jumped after the Wall Street Journal reported that the Trump administration was in talks with several of them to take equity stakes in exchange for federal funding.
IonQ, D-Wave Quantum, Quantum Computing and Rigetti Computing added between 7.1% and 13.8%.
Advancing issues outnumbered decliners by a 2.05-to-1 ratio on the NYSE. There were 259 new highs and 55 new lows on the NYSE. On the Nasdaq, 3,009 stocks rose and 1,618 fell as advancing issues outnumbered decliners by a 1.86-to-1 ratio. The S&P 500 posted 15 new 52-week highs and 4 new lows while the Nasdaq Composite recorded 70 new highs and 75 new lows.
Volume on U.S. exchanges was 19.07 billion shares, compared with the 20.62 billion average for the full session over the last 20 trading days.
Reuters, Globe staff