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Equities

Canada’s main stock index opened up Wednesday with energy stocks buoyed by higher crude prices. On Wall Street, key indexes were also positive ahead of what is expected to be another outsized rate hike from the Federal Reserve.

At 9:30 a.m. ET, the resource-heavy Toronto Stock Exchange’s S&P/TSX composite index was up 105 points, or 0.54 per cent, at 19,473.69.

The Dow Jones Industrial Average rose 113.2 points, or 0.37 per cent, at the open to 30819.39. The S&P 500 rose 15.5 points, or 0.40 per cent, at the open to 3871.4, while the Nasdaq Composite rose 41.2 points, or 0.36 per cent, to 11466.21 at the opening bell.

For traders, the day’s key event will be the Fed’s rate decision, due at 2 p.m. Markets have priced in another 75-basis-point hike but investors will also be watching closely for hints about how aggressive the central bank expects to be in the months ahead as it battles inflation.

“Activity on Fed funds futures still assesses less than 20-per-cent probability for a 100-basis-point hike from the Fed today,” Swissquote senior analyst Ipek Ozkardeskaya said. “And more importantly, the FOMC doesn’t have a modern history of making abrupt moves, except for dovish moves which have a sudden positive impact on the markets, like the ones we saw during the pandemic.”

“So, the expectation is that the Fed will deliver a 75-basis-point hike today,” she said. “We could see a relief rally in equity and bond markets, if, of course, the dot plot doesn’t show projections going above market expectations.”

Wednesday's small-cap stocks to watch

Earlier, world markets were rattled by new comments from Russian President Vladimir Putin. The Globe’s Mark MacKinnon reports Mr. Putin has doubled down on his war against Ukraine, ordering a partial mobilization of reservists and warning that his country was willing to use its nuclear arsenal if Russian territory was attacked.

In this country, Aurora Cannabis Inc. says its net loss widened to $618.8-million in its most recent quarter from $134-million last year as it recorded $505.1-million in impairment charges. Aurora reported net revenue for the quarter ended June 30 of $50.2-million, down 8 per cent from $54.8-million the year before. The results were released after Tuesday’s closing bell.

Wednesday's analyst upgrades and downgrades

Overseas, the pan-European STOXX 600 edged up 0.49 per cent by afternoon. Germany’s DAX and France’s CAC 40 slid 0.13 per cent and 0.26 per cent, respectively. Britain’s FTSE 100 rose 0.56 per cent.

In Asia, Japan’s Nikkei closed down 1.36 per cent. Hong Kong’s Hang Seng lost 1.79 per cent.

Commodities

Crude prices jumped after Russian president Vladimir Putin’s announcement of a partial mobilization of reservists heightened concerns over global oil and gas supply.

The day range on Brent was US$90.16 to US$93.50 early Wednesday morning. The range on West Texas Intermediate was US$83.48 to US$86.68.

Putin said he had signed a decree on partial mobilization beginning on Wednesday.

“The move could possibly lead to calls for more aggressive action against Russia in terms of sanctions from the west,” Warren Patterson, head of commodities research at ING, said.

Elsewhere, the American Petroleum Institute reported that U.S. crude inventories rose by about 1 million barrels last week. A Reuters poll of analysts had forecast an increase of more than 2 million barrels. More official U.S. government figures are due later Wednesday morning.

Gold prices, meanwhile, were higher as tensions in Europe sparked renewed interest in safe-haven holdings.

Spot gold was up 0.5 per cent at US$1,670.57 per ounce. U.S. gold futures rose 0.6 per cent to US$1,680.40.

Currencies

The Canadian dollar was modestly lower, trading under 75 US cents, while its U.S. counterpart hit a two-decade high against a group of world currencies ahead of the Fed’s policy decision.

The day range on the loonie is 74.66 US cents to 74.86 US cents.

“Weaker than expected headline CPI data yesterday dampened BoC rate hike expectations very modestly; elevated core price growth suggests a half point hike remains the most likely outcome for the BoC late Oct policy decision, however,” Shaun Osborne, chief FX strategist with RBC, said in an early note.

“Deputy Governor [Paul] Beaudry commented yesterday that inflation appears to be heading in the right direction but the central bank remains ready to take whatever actions are needed to curb inflation.”

On world markets, the U.S. dollar index, which measures the greenback against other major currencies, more than 0.5 per cent higher to 110.87 after Vladimir Putin’s announcement of a partial military mobilization of reservists triggered safe-haven buying. That was its highest level since 2002, according to Reuters.

The euro, meanwhile, fell to a two-week low of US$0.9885, near two-decade lows hit earlier this month. It was last down 0.6 per cent at US$0.9912, according to figures from Reuters.

Britain’s pound fell to a fresh 37-year low of US$1.1304.

In bonds, the yield on the U.S. 10-year note was down slightly at 3.54 per cent.

More company news

The Globe’s Jeffrey Jones reports Toronto-Dominion Bank has launched a carbon advisory business and is investing $10-million in a major Ontario forest conservation project, making it the latest Canadian financial institution to pursue strategic moves in the carbon-offset and credit markets.

Teck Resources Ltd. is cutting its steelmaking coal sales guidance after an equipment failure at its Elkview operation in B.C. and a strike at Westshore Terminals. The Vancouver-based miner says it now expects its third-quarter steelmaking coal sales to be between 5.5 million and 5.9 million tonnes compared with earlier guidance for between 5.8 million and 6.2 million tonnes. -The Canadian Press

Cheerios cereal maker General Mills Inc raised its full-year sales forecast on Wednesday, banking on higher prices and resilient demand for its breakfast cereals, snack bars and pet food. The company now expects organic net sales to rise between 6 per cent and 7 per cent in fiscal 2023. It had earlier forecast sales to grow 4 per cent to 5 per cent. -Reuters

Economic news

Bank of Japan monetary policy meeting (through Thursday)

(10 a.m. ET) U.S. existing home sales.

(2 p.m. ET) U.S. Fed announcement and summary of economic projections with chair Jerome Powell’s press briefing to follow.

With Reuters and The Canadian Press