TORONTO – Canada’s main stock index rose 1.3 per cent Thursday in a broad-based rally with strong gains in technology and base metal stocks, while U.S. stocks saw a more muted rise.
The S&P/TSX composite index closed up 334.95 points at 25,808.25.
In New York, the Dow Jones industrial average was up 168.61 points at 44,882.13. The S&P 500 index was up 31.86 points at 6,071.17, while the Nasdaq composite was up 49.43 points at 19,681.75.
“The rally here is led by base material stocks and technology stocks in Canada,” said Ilana Schonwetter, investment advisor and portfolio manager at BlueShore Financial.
The gains came a day after the Bank of Canada cut its key interest rate to three per cent.
Inflation is within the central bank’s range and spending is picking up, but the potential for a trade war with the U.S. is clouding the economic outlook, said Schonwetter.
“Everybody is in a bit of a holding pattern right now to see what is going to transpire around tariffs, because, of course, implications on certain sectors could be very significant,” she said.
U.S. President Donald Trump has threatened to enact sweeping tariffs on Canadian goods as early as Saturday.
The Bank of Canada is “between a rock and a hard place,” said Schonwetter.
“Tariffs will, without a doubt, have a negative impact on the Canadian economy, which should cause them to lower rates, but with the loonie weakening even further, that of course creates inflationary pressure on everything that is imported into Canada from the United States,” she said.
“So it’s a very, very difficult balancing act between ensuring economic strength without causing inflation to start to tick up.”
The big story for U.S. stocks this week was news of a Chinese startup’s large language model, called DeepSeek, that was made for a significantly lower cost than projections by U.S. competitors, said Schonwetter.
“That really has been, I would say, the most significant event this week,” she said.
Large tech stocks, especially chipmaker Nvidia, took a big hit Monday, though they reversed some of the losses the next day.
The news might have shocked the market but it’s not all bad, said Schonwetter.
“I almost feel like the heightened competition is expected to drive an increased spending in the area … there’s still a lot of momentum in the sector,” she said.
Thursday brought a grab bag of tech earnings in the U.S.
Meta rose 1.6 per cent after beating profit expectations and talking up its artificial intelligence investments, while Tesla and IBM also rose after reporting earnings even though Tesla’s profits were weaker than expected.
Meanwhile, Microsoft shares sank 6.2 per cent after growth in its cloud computing business was slower than expected.
The latest U.S. GDP report indicated the American economy grew at a solid pace in the final quarter of 2024, though slightly slower than expected.
The Canadian dollar traded for 69.38 cents US compared with 69.28 cents US on Wednesday.
The March crude oil contract was up 11 cents at US$72.73 per barrel and the March natural gas contract was down 12 cents at US$3.05 per mmBTU.
The April gold contract was up US$51.70 at US$2,845.20 an ounce and the March copper contract was up three cents at US$4.31 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Jan. 30, 2025.
Companies in this story: (TSX:GSPTSE, TSX:CADUS)
