Canada’s main stock index edged higher on Friday, adding to its monthly gain, as the prospect of an extended ceasefire in the Middle East buoyed investor sentiment, with technology and gold mining shares among the biggest gainers.
The Toronto Stock Exchange’s S&P/TSX Composite Index ended up 240.87 points, or 0.7 per cent, at 34,758.57. For the month, the index was up 2.4 per cent, marking its second straight month of gains.
Canada’s economy posted a surprise contraction in the first quarter, making it two straight quarters of annualized decline as the country struggles with U.S. tariff uncertainty and reducing expectations for Bank of Canada interest rate hikes this year.
“Overall, this was a very weak report from most angles that shows that trade uncertainty and tariffs are continuing to hold back growth, while consumers have little ammunition left for spending ahead,” said Katherine Judge, senior economist at CIBC Capital Markets.
The Trump administration wants to increase the level of regional content in North American-built vehicles to 82 per cent to qualify for preferential treatment under the U.S.-Mexico-Canada Agreement on trade, with 50 per cent of that value produced in the United States, four people familiar with the U.S. negotiating position said.
Technology gained 4.7 per cent, with shares of electronic equipment firm Celestica Inc. ending 10.2 per cent higher.
The materials group, which includes metal mining shares, was up 2.6 per cent as gold prices climbed.
Energy was a drag, falling 1.2 per cent. The price of oil settled 1.3 per cent lower at US$87.72 a barrel.
Wall Street’s main indexes hit record closing highs on Friday and posted weekly and monthly gains as Dell results drove tech shares higher, while investors awaited details on a potential U.S.-Iran deal.
President Donald Trump said in a social media post that he would make a final decision on the Iran deal on Friday. Tehran earlier said it was looking for action, not words, when it came to an agreement.
Dell surged 32.8 per cent after raising its full-year profit and revenue forecasts on Thursday. The tech sectorclimbed 1.87 per cent, fueled by gains in chip stocks.
Peers Hewlett Packard Enterprise and Super Micro Computer gained 12.6 per cent and 11.6 per cent respectively. Microsoft climbed 5.4 per cent.
The software services index also advanced by over 6 per cent, erasing all losses since January-end, when concerns over AI disruption had weighed on the sector.
Earlier in the session, all three indexes hit intraday record highs, cruising on renewed optimism around AI and strong earnings growth, despite concerns about the Iran war’s impact on inflation and the global economy.
The Dow Jones Industrial Average rose 363.37 points, or 0.72 per cent, to 51,032.34, the S&P 500 gained 16.44 points, or 0.22 per cent, to 7,580.07 and the Nasdaq Composite gained 55.15 points, or 0.21 per cent, to 26,972.62.
The small-cap Russell 2000 index was down 0.6 per cent.
For the week, the S&P 500 gained 1.43 per cent, the Nasdaq rose 2.39 per cent, and the Dow climbed 0.9 per cent. The Russell 2000 index rose 1.72 per cent.
For the month, since April 30, the S&P 500 gained 5.15 per cent, the Nasdaq rose 8.36 per cent, and the Dow climbed 2.78 per cent. The Russell 2000 index rose 4.24 per cent.
The S&P 500 registered its ninth consecutive weekly gain, its longest winning streak since December 2023.
“There’s definitely euphoric sentiment in the market around AI. The rally has really been driven by earnings,” said Ohsung Kwon, chief equity strategist at Wells Fargo.
He suggested investors buy and hold AI stocks, then earn extra income by selling call options at prices much higher than the current stock price.
Melissa Brown, head of investment decision research at SimCorp, said over the past few weeks volume has gone up, which suggests more people are coming into the market.
The S&P 500 communications services sector dropped, as Alphabet declined by 2.5 per cent.
Consumer staples shares were weak, with heavyweights Costco and Walmart down 3.9 per cent and 2.6 per cent respectively.
The S&P automaker index dropped after reports the Trump administration wants North American-built vehicles to have 82 per cent regional content to qualify for preferential treatment under the U.S.-Mexico-Canada Agreement.
Shares of General Motor fell 1.3 per cent and U.S.-listed shares of Stellantis dropped 2.7 per cent.
U.S. economic data on Thursday showed inflation increased at its fastest pace in three years in April, while GDP for the first quarter was revised lower to a 1.6 per cent annual rise.
The Fed’s Kansas City President Jeffrey Schmid warned the energy shock may not be temporary. Vice Chair for Supervision Michelle Bowman said a persistent rise in inflation might require tighter monetary policy.
Money markets expect the Federal Reserve to keep interest rates steady for the rest of the year, with expectations of a 25-basis-point hike in December.
Among other movers, Gap shares tumbled 15.4 per cent after the apparel retailer cut its annual sales forecast, while American Eagle Outfitters dropped 11.8 per cent after keeping its annual comparable sales forecast unchanged.
Reuters