Major indexes closed higher on Wednesday as oil prices fell while Iran reviewed a U.S. proposal to end the war in the Middle East, feeding investor hopes for de-escalation in the fourth week of a war that has disrupted global energy flows and stoked inflation concerns.
While Abbas Araqchi, Iran’s foreign minister, said that authorities were reviewing the U.S. proposals, he added that Tehran has no intention to hold talks with Washington. Initially, Iran said it considered U.S. proposals delivered by Pakistan as excessive and demanded sovereignty over the Strait of Hormuz.
The mixed messages led to choppy trading.
Any signs of communication between the countries provided some hope for investors, following signals that Washington has been seeking a ceasefire and restoration of shipping through the crucial Strait of Hormuz, which about 20% of global oil shipments pass through.
“There is optimism that the proposal and counter-proposal are setting the stage for more negotiations,” said Gene Goldman, chief investment officer at Cetera Investment Management. But until there is clarity on when the war might end, Goldman said he expects “volatility to remain elevated given the impact of higher oil prices on inflation.”
The Dow Jones Industrial Average rose 305.43 points, or 0.66%, to 46,429.49, the S&P 500 gained 35.53 points, or 0.54%, to 6,591.90 and the Nasdaq Composite gained 167.93 points, or 0.77%, to 21,929.83.
The S&P/TSX composite index ended up 441.01 points, or 1.4%, at 32,382.60, marking its third straight day of gains and its highest closing level since March 17.
All 10 major TSX sectors notched gains, including the materials sector , which includes metal mining shares. It was up 3.3% as gold and copper prices climbed. Industrials rose 1.3%, heavily weighted financials added 0.9% and utilities ended 1.2% higher.
Shares of Boralex jumped nearly 11% after the company agreed to be acquired by Brookfield and La Caisse.
Energy was up 0.8% in Toronto even as the price of oil settled 2.2% lower at US$90.32 a barrel.
In the U.S., energy was the weakest of the S&P 500’s 11 major industry sectors, falling 0.5%. The strongest sector gainers were materials, up 2%, and consumer discretionary, which added 1.2%.
The small-cap Russell 2000 index finished up 1.2% after hitting a two-week high during the trading session.
U.S.-listed shares of Arm rallied 16.4% after the company unveiled a new AI data center chip that is expected to bring billions of dollars in revenue. It was the biggest gainer in the Philadelphia Semiconductor Index, which closed up 1.2%.
Other rallying chipmakers included Advanced Micro Devices and Intel, which both finished up more than 7%. Nvidia shares added 2%.
Destiny Tech100 surged 15% after a report that SpaceX aims to file its IPO prospectus as soon as this week. SpaceX is the fund’s largest equity holding.
Other space companies rallied in response with Rocket Lab adding 10.3% while Intuitive Machines rose 14.7% and EchoStar added 7.4%.
Among other movers, U.S.-listed shares of JD.com rose 8% and Alibaba rose 3.5% after Chinese state media and the regulator urged the food-delivery platform industry to end a price war. Robinhood Markets rallied 5% after the trading platform announced a new $1.5 billion share buyback program.
In currency markets, the Canadian dollar weakened to a two-month low against its U.S. counterpart. The loonie was trading 0.3% lower at 1.3809 per U.S. dollar, or 72.42 U.S. cents, marking its weakest intraday level since January 22.
“The loonie’s descent to a two-month low suggests that internal economic deceleration is now weighing more heavily on the currency than the support typically provided by favorable terms of trade in energy,” said Kevin Ford, FX & macro strategist at Convera. “Following a cautious tone from the Bank of Canada last week, investors have turned the focus back to a sluggish labour market and economic macro figures that have missed projections.”
Canada’s economy has been disrupted by hefty U.S. tariffs on critical sectors, such as autos, steel and aluminum. Exports were down 14.6% year-over-year in January and employment declined by 84,000 in February.
Canadian bond yields moved lower across the curve. The 10-year was down 8.6 basis points at 3.483%, extending its pullback from Monday’s near two-year high at 3.643%.
Reuters, Globe staff