Canada’s main stock index ticked higher Thursday thanks to higher commodity prices, even as fresh inflation data south of the border caused U.S. markets to fall back from the previous day's record highs.
The S&P/TSX composite index closed up 77.36 points at 24,302.26.
That came in contrast to New York, where the Dow Jones industrial average was down 57.88 points at 42,454.12 after setting an all-time high in Wednesday trading. The S&P 500 index was down 11.99 points at 5,780.05, after also setting a new record the day before, while the Nasdaq composite was down 9.57 points at 18,282.05.
U.S. markets fell on the back of the latest consumer price index report, which showed U.S. inflation coming in slightly higher than expected in September.
Stock markets have been benefiting in recent weeks from investor enthusiasm about future interest rate cuts by the U.S. Federal Reserve. But Thursday’s report showing inflation may still be too hot for the Fed’s liking increases the possibility that the central bank will move slower than some traders want on lowering its key interest rate.
“We were looking at potentially a 25 or 50 basis point rate cut at the November meeting,” said Anish Chopra, managing director of Portfolio Management Corp.
"But now, investors are thinking that given the inflation numbers, it could be a 25 basis point rate cut — or there’s a chance there’s no rate cut at all in November.”
But even as U.S. markets absorbed the possibility that inflation might not be moving as quickly as hoped toward the Fed’s two per cent target, Canada’s main stock index moved into positive territory Thursday.
Both crude oil and gold were higher on the day, leading to improvements for Canadian mining and energy stocks. The TSX’s heavy weighting in energy, in particular, helped lift the index even as U.S. markets slid.
Outside the energy and mining sector, other big movers in Canada on Thursday included Air Canada, which gained 4.44 per cent to close at $17.39 per share on news that the airline's pilots voted in favour of a new contract, a development that douses fears of a damaging strike.
On the losing side of the day was TD Bank, whose share price lost 5.03 per cent on news that it will pay about US$3.09 billion in fines from U.S. regulators after pleading guilty to multiple charges related to failures in its anti-money laundering program. TD's stock price closed at $81.76 Thursday.
With geopolitical risks related to tensions in the Middle East continuing to swirl, and uncertainty about inflation and Federal Reserve decisions dominating investors' minds, Chopra said all eyes will be on the latest crop of corporate earnings as they begin to roll in.
"That will really help investors put into perspective what's happening in the economy, on a company-by-company or industry-by-industry basis," Chopra said.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$2.61 at US$75.85 per barrel and the November natural gas contract was up two cents at US$2.68 per mmBTU.
The December gold contract was up US$13.30 at US$2,639.30 an ounce and the December copper contract was up three cents at US$4.43 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
- With files from The Associated Press
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Amanda Stephenson, The Canadian Press
