TORONTO – Canada’s main stock index gained almost 200 points Friday, led by strength in energy, tech and base metals, while U.S. markets also rose.
The latest U.S. employment report surprised to the upside, bringing relief to market watchers, said Graham Priest, portfolio manager at BlueShore Financial.
The report showed the U.S. economy added 254,000 jobs last month, higher than August and much better than economists had expected.
It also indicated an economic soft landing is still possible after the U.S. Federal Reserve hiked rates to quell inflation, said Priest.
“Overall, with the surprise in the jobs number and unemployment ticking down, it’s had a big impact,” he said.
Wall St. had been on edge after a couple of softer-than-expected employment reports heightened concerns that the Fed had waited too long to start cutting its key interest rate. Some traders were even betting that the Fed could announce another outsized half-percentage-point cut this year, after starting the easing cycle off with one last month.
But now that some worries about the employment situation have been soothed, the Fed looks set to steadily reduce its rate this year and into 2025, said Priest.
The S&P/TSX composite index closed up 194.33 points at 24,162.83.
In New York, the Dow Jones industrial average was up 341.16 points at 42,352.75, notching a new all-time high.
The S&P 500 index was up 51.13 points at 5,751.07,while the Nasdaq composite was up 219.38 points at 18,137.85.
The Canadian dollar traded for 73.65 cents UScompared with 73.86 cents US on Thursday.
The November crude oil contract was up 67 cents at US$74.38 per barrel and the November natural gas contract was down 12 cents at US$2.85 per mmBTU.
The December gold contract was down US$11.40 at US$2,667.80 an ounceand the December copper contract was up two cents at US$4.57 a pound.
Oil prices rose considerably this week as tensions ramped up in the Middle East, with Iran sending missiles into Israel and Israel intensifying its incursion into Lebanon.
Prices will likely continue to see upward pressure in the coming weeks as the conflict continues, said Priest, with concern over what a retaliation by Israel could mean for Iran’s crude exports and global supply.
Though markets have been on a good run recently, the uncertainty in the Middle East has seen investors taking a pause, Priest said.
One concern is that if the situation continues to worsen and oil supply is disrupted, higher prices could end up being inflationary, he added.
— With files from The Associated Press
This report by The Canadian Press was first published Oct. 4, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
