TORONTO – Canada’s main stock index gained nearly 300 points on Tuesday, while U.S. markets also rose as hopes of an interest-rate cut by the U.S. Federal Reserve swept through the market.
Tamsin Wilding, principal and portfolio manager for fixed income at Leith Wheeler Investment Counsel Ltd., said that stock markets were predominantly moving based on U.S. interest rate expectations. Lower interest rates can cover up many sins in financial markets, including prices going too high, and hopes are high that the Fed will cut its main interest rate at its next meeting to juice the economy further.
Wilding said some of the main drivers influencing the markets included macroeconomic data from the U.S. that “revealed a picture of a softening consumer.”
“That’s really reinforcing the pricing for that Fed cut in December, which is now sitting just around that 90 per cent level,” she said.
A raft of economic data on Tuesday left traders betting on a nearly 85 per cent probability that the Fed will cut in December, according to data from CME Group. That’s roughly the same as a day before and up sharply from the coin flip’s chance that traders saw just a week ago.
One of Tuesday’s reports said that shoppers bought less at U.S. retailers in September than economists expected.
Another said confidence among U.S. consumers worsened by more than expected, a second signal that the economy could potentially use the help of lower interest rates. Easier rates can boost the economy by encouraging households and companies to borrow more and investors to pay higher prices for investments than they would otherwise.
“I think overall that picture of both a softening consumer and a gradually slowing labour market is green-lighting that the Fed is able to ease despite what’s a bit of a messy data schedule at the moment, as we’re still playing catch-up from that government shutdown,” Wilding said.
In New York, the Dow Jones industrial average was up 664.18 points at 47,112.45. The S&P 500 index was up 60.76 points at 6,765.88, while the Nasdaq composite was up 153.59 points at 23,025.59.
She added that hopes for a Fed rate cut likely spurred some of the gains on Canada’s benchmark index.
Canadian investors will also be closely monitoring a report on the health of the Canadian economy on Friday, with Statistics Canada scheduled to release gross domestic product figures for September and the third quarter as a whole.
“I think the market’s really looking for an ongoing stabilization of the Canadian economy,” Wilding said.
Elsewhere on the TSX, Alimentation Couche-Tard Inc. gained 4.9 per cent after reporting earnings on Monday evening. The Laval, Que.-based company served up solid earnings growth last quarter despite cost-of-living concerns among customers.
The S&P/TSX composite index was up 296.30 points at 30,900.65.
The Canadian dollar traded for 70.90 cents US compared with 70.88 cents US on Monday.
The January crude oil contract was down 89 cents US at US$57.95 per barrel. The February gold contract was up US$46.50 at US$4,177.30 an ounce.
This report by The Canadian Press was first published Nov. 25, 2025.
— With files from The Associated Press
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
