Canada’s main stock index clawed back some earlier declines to end higher on Tuesday, led by financial and gold-mining shares, as investors weighed hotter-than-expected domestic inflation data as well as escalating tensions between Russia and Ukraine. The S&P 500 and Nasdaq also closed higher, although the Dow ended in the red.
The S&P/TSX composite index ended up 33.83 points, or 0.1%, at 25,010.77, moving closer to the record closing high it notched last Thursday.
“There are some positive narratives that are developing with the inflation print that we had and the fact that maybe there is no real need to have an accelerated rate cut cycle here as well,” said Sid Mokhtari, chief market technician for CIBC Capital Markets.
“That is buoying some of the financials which are a big part of the TSX index,” Mokhtari said, adding that financials could benefit from a steeper yield curve and expected looser business regulations in the United States.
Canada’s annual inflation rate climbed to 2% in October, spurring investors to reduce bets on an outsized interest rate cut by the Bank of Canada next month.
The financials sector, which accounts for 31% of the TSX’s weighting, rose 0.2%, adding to its recent gains.
The materials group was up 1.7% as gold benefited from a safe-haven bid after Ukraine used U.S. ATACMS missiles to strike Russian territory.
Oil also gained ground, settling 0.3% higher at US$69.39 a barrel. But energy was down 0.3%, with TC Energy falling 0.5% as investors weighed the company’s 2025 core profit forecast.
Still, the energy sector has advanced about 11% since September.
“If we can see the energy sector being able to rebuild itself ... that’s going to keep the TSX better buoyed as we go into year-end,” Mokhtari said.
The consumer staples sector also ended lower on Tuesday, falling 1.1%.
Gains on Wall Street were led by a jump in technology shares as investors eagerly awaited results this week from Nvidia, while Walmart shares climbed after the retailer raised its annual forecasts.
All three major U.S. indexes started the day lower, with the benchmark S&P 500 index dropping as much as about 0.6% after Russian President Vladimir Putin lowered the threshold for a nuclear strike in response to a broader range of conventional attacks earlier in the day, and Moscow said Ukraine had struck deep inside Russia with U.S.-made long-range missiles.
Stocks pared losses as Russian Foreign Minister Sergei Lavrov said Moscow will do everything possible to prevent a nuclear war.
Chipmaker Nvidia, which is due to report quarterly results after the bell on Wednesday, climbed 4.9% to $147.01 and was the biggest boost for all three major indexes. Technology climbed 1.2% and led gains among S&P 500 sectors.
Strategists said expectations are high for Nvidia, which has driven the artificial intelligence-related rally in stocks.
“The biggest takeaway today is caution around what’s going on in Ukraine. Largely investors are hiding out in some of the megacap names, which is a little bit surprising ahead of Nvidia earnings, but they are highly liquid,” said Timothy Chubb, chief investment officer at Girard, a Univest Wealth Division.
The Dow Jones Industrial Average fell 120.66 points, or 0.28%, to 43,268.94. The S&P 500 gained 23.36 points, or 0.40%, at 5,916.98 and the Nasdaq Composite rose 195.66 points, or 1.04%, to 18,987.47.
Walmart shares rose 3% to US$86.60 and hit a record closing high after the retailer raised its annual sales and profit forecasts for the third consecutive time.
“Walmart came in and delivered optimistic guidance,” said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina. “One of the components that was important for the market was that it said more of their customers are going in and purchasing items in the higher margin categories, which is something that has been watched.”
Super Micro Computer jumped 31.2% after the artificial intelligence server maker named BDO USA as its auditor and said it has submitted a plan to the Nasdaq to avoid delisting.
Shares of Netflix rose 2.9% to US$871.32, hitting a record high for a second straight day, after the streaming media company said 108 million people watched a boxing match between Jake Paul and Mike Tyson.
Adding to optimism, Goldman Sachs strategists forecast the S&P 500 would reach 6,500 by the end of 2025.
Investors are digesting picks for President-elect Donald Trump’s administration.
Trump said on Tuesday he had chosen celebrity doctor Mehmet Oz to serve as administrator for the Centers for Medicare and Medicaid Services. He also said he will nominate Wall Street CEO Howard Lutnick to serve as commerce secretary.
Advancing issues outnumbered decliners by a 1.14-to-1 ratio on the NYSE. There were 172 new highs and 97 new lows on the NYSE. On the Nasdaq, 2,459 stocks rose and 1,841 fell as advancing issues outnumbered decliners by a 1.34-to-1 ratio. Volume on U.S. exchanges was 13.94 billion shares, compared with the 14.24 billion average for the full session over the last 20 trading days.
Reuters, Globe staff