TORONTO – Strength in technology and utility stocks pushed Canada’s main stock index higher on Thursday, while U.S. stock markets were down after a choppy day of trading.
The S&P/TSX composite index closed up 56.90 points at 24,846.20.
In New York, the Dow Jones industrial average was down 68.42 points at 43,153.13. The S&P 500 index was down 12.57 points at 5,937.34, while the Nasdaq composite was down 172.95 points at 19,338.29.
Canadian and U.S. markets are seeing a lot of volatility right now as president-elect Donald Trump’s inauguration looms, said Adelaide Chiu, portfolio manager, vice-president and head of responsible investing at NEI Investments.
Trump has threatened significant tariffs on Canadian imports, so whether he follows through and whether Canada retaliates is the “biggest unknown,” she said.
“There’s definitely a lot of volatility in the market because of that.”
Prime Minister Justin Trudeau’s resignation and a pending election add to that uncertainty in Canada, said Chiu.
Amid the uncertainty, U.S. companies began reporting earnings this week, starting with the major banks. Reports Thursday were mixed, with Morgan Stanley and Bank of America beating expectations while U.S. Bancorp and UnitedHealth Group fell short.
Tesla was one of the biggest drags on the market after news it is offering discounts on the Cybertruck.
Thursday brought more data showing growth for sales at U.S. retailers last month came in under expectations, while applications for unemployment benefits last week rose, and a report on manufacturing was stronger than expected.
The U.S. Federal Reserve has forecast just two interest rate cuts this year as the economy has remained resilient. However, Wednesday’s inflation report spurred hopes for more cuts this year.
Meanwhile in Canada, the economy has faltered more under the weight of higher interest rates. The central bank has cut rates at a faster pace than its U.S. counterpart as a result.
In a speech Thursday, Bank of Canada deputy governor Toni Gravelle said the central bank plans to end quantitative tightening in the first half of 2025, resuming more normal activity after the extraordinary measures it took to boost the economy during the COVID-19 pandemic.
At the same time, the central bank is expected to continue cutting interest rates this year but at a slower pace as it looks to near a more neutral rate after quelling inflation.
However, with Canada’s economy and interest rate policy diverging from that of the U.S., “There are a lot of moving parts in terms of where the rates will go,” said Chiu.
One of those is currency, as the loonie has been under pressure, she said.
The Canadian dollar traded for 69.50 cents US compared with 69.76 cents US on Wednesday.
The March crude oil contract was down 86 cents at US$77.85 per barrel and the February natural gas contract was up 18 cents at US$4.26 per mmBTU.
The February gold contract was up US$33.10 at US$2,750.90 an ounceand the March copper contract was up five cents at US$4.44 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Jan. 16, 2025.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
