TSX, U.S. markets gain ground Thursday following U.S. inflation report

TORONTO – Stock markets in Canada and the U.S. rose on Thursday following the release of key U.S. economic data.

Investors sifted through an encouraging report on inflation that could help the U.S. Federal Reserve keep cutting interest rates next year. Markets love lower rates because they can boost the economy and prices for investments, even if they may also worsen inflation.

The U.S. Labor Department reported Thursday that its consumer price index rose 2.7 per cent in November from a year earlier. Yet, year-over-year inflation remains well above the Fed’s two per cent target.

“We’ve had a couple of down days in a row, starting back to last Friday, especially in the tech sector where we were really seeing some weakness. But that inflation report in the U.S. this morning really turned it around,” said John Zechner, chairman and lead equity manager at J. Zechner Associates.

Sector-wise, tech stocks did much of the heavy lifting on Bay and Wall streets.

The S&P/TSX composite index was up 190.83 points at 31,440.85.

In New York, the Dow Jones industrial average was up 65.88 points at 47,951.85. The S&P 500 index was up 53.33 points at 6,774.76, while the Nasdaq composite was up 313.04 points at 23,006.36.

“There had been some negative momentum on this tech story. People are really worried that this whole AI story and the data center build-out has really gotten ahead of itself,” Zechner said.

Shopify Inc. added the most points to Canada’s benchmark index, gaining 3.08 per cent on the day.

Helping to drive the U.S. stock market was Micron Technology, the seller of memory and storage for computers, which rallied 10 per cent after reporting better profit and revenue for the latest quarter than analysts expected. Micron also gave forecasts for upcoming profit and revenue that blew past analysts’ expectations.

“It’s the memory market, and memory is core to the data center build out and all of that,” Zechner said.

“It reaffirmed a bit of the AI positive story. The market has been really sloppy on a lot of those things, and that took away the worries for today anyway.”

Separately, U.S. President Donald Trump also signed an executive order Thursday that could reclassify marijuana as a less dangerous drug and open new avenues for medical research. Trump has not previously committed to another, bigger step: decriminalizing marijuana.

Shares of Tilray Brands Inc. fell 4.88 per cent, while Canopy Growth Corp. shares were down 12.45 per cent. Aurora Cannabis Inc. shares were down 3.5 per cent, and Organigram Global Inc. was down 3.10 per cent.

The Canadian dollar traded for 72.60 cents US compared with 72.56 cents US on Wednesday.

The February crude oil contract was up 19 cents US at US$56.00 per barrel. The February gold contract was down US$9.40 at US$4,364.50 an ounce.