The S&P/TSX Composite Index rose by 1.2%, reaching its highest level since June, driven by robust performances in the metals, energy, and financial sectors, bolstered by a weakening US dollar and lower interest rate expectations.
Closing at 22,223.67, the S&P/TSX Composite Index saw a broad-based rally, with the materials sector leading the charge. The materials group surged by 3.4%, fueled by higher gold and copper prices amid a depreciating US dollar. Energy stocks also posted gains, rising 0.6% as oil prices climbed 1.3% to $83.88 per barrel. Other sectors, including financials, industrials, and utilities, also saw positive movement, with utilities up 1.5% in light of potential interest rate cuts. US economic indicators pointing to a cooling labor market have heightened speculation regarding future Federal Reserve interest rate reductions.
The decline of the US dollar to a nearly three-week low against major currencies has increased the appeal of commodities such as gold and copper, which in turn has lifted materials and energy stocks, essential components of the Canadian market. With US economic data indicating slower job growth and the possibility of Federal Reserve interest rate cuts, commodity-driven sectors are expected to continue thriving.
Additionally, the US 10-year Treasury yield’s decline by approximately 8 basis points suggests lower borrowing costs, likely boosting investments in high dividend-paying stocks within the utilities sector. Companies such as Open Text Corp saw their shares rise by 1.5% following strategic business optimizations. These diverse gains underscore a resilient Canadian market poised to capitalize on global economic trends.
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