TORONTO – Canada’s main stock index climbed higher Wednesday, led by strength in technology stocks, while U.S. markets were mixed, hovering around recent highs reached in the wake of the presidential election.
The S&P/TSX composite index closed up 66.01 points at 24,989.02.
In New York, the Dow Jones industrial average was up 47.21 points at 43,958.19. The S&P 500 index was up 1.39 points at 5,985.38, while the Nasdaq composite was down 50.66 points at 19,230.74.
“The main data point that came out today that is influencing markets is the CPI data for the U.S. that came out for October,” said Macan Nia, co-chief investment strategist at Manulife Investment Management.
The report showed that headline inflation rose to 2.6 per cent last month, but core inflation did not accelerate.
The numbers were within expectations, said Nia: “It’s just showing the continued narrative that the U.S. Federal Reserve is winning against … inflation.”
That means the Fed will likely continue lowering its key interest rate, he said, including with another quarter-percentage-point cut at its next meeting.
“That’s what’s driving markets today, or supporting markets today,” said Nia.
“Given the volatility in inflation prints over the past couple of years,” he added, “it’s very nice to see a very benign inflation print.”
Markets rallied for several days after Donald Trump won last week’s U.S. election, with sectors seen as beneficiaries to his promised policies leading the gains.
“Markets like corporate taxes being cut. Markets like deregulation, and those are two staples of the Trump administration policy,” said Nia.
But it remains to be seen whether Trump’s actions square with his words, he said.
“The reality is, the only certainty is that there’s going to be uncertainty.”
As Trump unveils his cabinet ahead of his presidency, markets are looking for clues as to what could lie ahead, added Nia.
As markets rallied, Treasury yields have also been up, pricing in the anticipated inflationary impacts of certain Trump promises such as significantly higher tariffs.
Expectations for the Fed’s interest rate policy have shifted somewhat post-election, as inflationary pressures may mean the central bank needs to be slower or shallower with its cuts.
The Canadian dollar traded for 71.53 cents US compared with 71.72 cents US on Tuesday.
The December crude oil contract was up 31 cents at US$68.43 per barrel and the December natural gas contract was up seven cents at US$2.98 per mmBTU.
The December gold contract was down US$19.80 at US$2,586.50 an ounce and the December copper contract was down six cents at US$4.08 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Nov. 13, 2024.
