Canada’s main stock index advanced on Tuesday, led by metal mining shares, but the move was limited ahead of interest rate decisions by the Bank of Canada and the Federal Reserve.
The S&P/TSX Composite Index ended up 74.40 points, or 0.2%, at 31,244.37, edging closer to the record closing high it posted on Thursday.
The Bank of Canada is expected to leave its benchmark interest rate on hold at a three-year low of 2.25% on Wednesday, while the Fed is expected to continue its easing campaign.
The prospect of further central bank easing and recent increases in precious metal prices are “pretty constructive” for the market, said Stan Wong, portfolio manager at Scotia Wealth Management.
Possible shifts next year in central bank policy as well as U.S. midterm elections and a joint review of the United States-Mexico-Canada Agreement on trade could lead to pockets of increased market volatility, Wong said, adding that such bouts of uncertainty could present buying opportunities for investors.
The materials group, which includes metal mining shares, rose 2% as the price of silver climbed 4.5% to a record high. Shareholders of Anglo American and Teck Resources approved a previously announced merger, paving the way for the creation of a copper heavyweight and leaving regulatory approvals as the final hurdle. Teck’s shares were up 0.8%.
Technology rose 0.3% and heavily weighted financials ended 0.4% higher.
Brookfield and Qai, an artificial intelligence company owned by Qatar’s sovereign wealth fund, have formed a US$20 billion joint venture to develop artificial intelligence infrastructure in Qatar and select international markets, the two groups said. Shares of Brookfield added 0.5%.
Energy was a drag, falling 1.1%, as the price of oil settled 1.1% lower at $58.25 a barrel. Investors were keeping a close eye on peace talks to end Russia’s war in Ukraine.
Industrials also lost ground, falling 0.9%, and consumer discretionary stocks ended 0.8% lower.
On Wall Street, the S&P 500 ended the session slightly lower as investors anticipated that the Federal Reserve would take a hawkish tone even if it cuts interest rates this week, while JP Morgan curbed gains after the biggest U.S. bank warned of hefty expenses for 2026.
Policymakers have sent mixed signals about the outlook with some warning that price pressures could easily reaccelerate, while others have been more concerned about the labor market’s health.
And Tuesday’s Labor Department report did little to clear the air as job openings increased marginally in October, but hiring remained subdued. Separately, a National Federation of Independent Business (NFIB) report showed companies intending to create new jobs in the near future.
“It appears that the bias for the market right now is that you’re going to see a modestly less dovish Fed because of the job openings,” said Jeff Schulze, head of economic and market strategy at ClearBridge.
Traders are still pricing in a roughly 87% chance of a 25-basis-point rate on Wednesday, according to CME’s FedWatch Tool. But Schulze sees “a higher likelihood of a pause after [Wednesday’s] rate cut.”
Adding to nerves ahead of the Fed’s update - due after its meeting ends on Wednesday - Justin Bergner, portfolio manager at Gabelli Funds said that a rally in U.S. Treasury yields was weighing on stocks.
“It’s not surprising the equity rally would stall ahead of the Fed and with bond yields continuing to rally,” said Bergner. The US 10-year Treasury yield was last up on the day at 4.18%, on track for its fourth straight day of gains.
The S&P 500 lost 0.09%, while the Nasdaq Composite gained 0.13%. The Dow Jones Industrial Average fell 0.38%.
After rising nearly 1% earlier in the day, the S&P 500 bank index weakened after JP Morgan Chase’s consumer and community banking chief Marianne Lake said the bank expects expenses to climb to about US$105 billion in 2026, driven largely by growth and volume-related costs.
Among the 11 S&P 500 industry sectors energy led gains during the session, while healthcare was the biggest loser.
Reuters, Globe staff