TORONTO – Canada’s main stock index finished narrowly in positive territory, while U.S. markets were mixed amid a pair of quarter-point interest rate cuts from both the U.S. Federal Reserve and the Bank of Canada on Wednesday.
“The U.S. market is a bit mixed. Traders were hoping for more news with regard to certainty for future rate cuts,” said Graham Priest, an investment adviser at BlueShore Financial.
Alongside its move to lower U.S. borrowing costs, the Fed projected it would cut rates twice more this year as concern grows at the central bank about the health of the U.S. labour market.
The move is the Fed’s first cut since December. Fed officials, led by chair Jerome Powell, had kept their rate unchanged this year as they evaluated the impact of tariffs, tighter immigration enforcement, and other Trump administration policies on inflation and the economy.
“The market was pricing in 25 basis points, but Powell’s language regarding future rate cuts — that’s what was most important. At this point, they see this rate cut as maintenance. They don’t want to be too aggressive with rate cuts,” Priest said.
He added that the Fed also doesn’t want to be too aggressive with its language regarding future rate cuts, as inflation stemming from tariffs remains unknown. While the U.S. central bank is trying to offset some of the weakness in the job market, Priest noted it is also concerned about inflation going forward.
Meanwhile, the Bank of Canada cut its key policy rate as the central bank worries less about inflation risks and more about a slowing economy. The central bank’s policy rate now stands at 2.5 per cent, breaking a streak of three consecutive holds since March.
“As far as what happened from the Bank of Canada, it was in line with investors’ expectations and therefore, there wasn’t a pullback in the market,” Priest said.
The S&P/TSX composite index was up 6.43 points at 29,321.66.
In New York, the Dow Jones industrial average was up 260.42 points at 46,018.32. The S&P 500 index was down 6.41 points at 6,600.35, while the Nasdaq composite was down 72.63 points at 22,261.33.
Sadiq Adatia, BMO Global Asset Management’s chief investment officer, said in a statement that the move by the Bank of Canada will provide people with “some much-needed support from high debt levels and uncertainty regarding tariffs.”
The Canadian dollar traded for 72.67 cents US compared with 72.74 cents US on Tuesday.
Going forward, Priest said he expects the loonie to perform well relative to the U.S. dollar.
“Energy prices will likely firm up, which will be good for the Canadian dollar, and the materials sector should be positive going forward, which would also be good for the dollar,” he said.
The November crude oil contract was down 46 cents US at US$63.70 per barrel.
The December gold contract was down US$7.30 at US$3,717.80 an ounce.
— With files from Craig Lord in Ottawa and The Associated Press.
This report by The Canadian Press was first published Sept. 17, 2025.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
