Canada’s main stock index rose on Thursday to another record high as resource shares notched gains and investors awaited a key speech by Federal Reserve Chair Jerome Powell. The gains came even as Wall Street’s main indexes fell, with Walmart’s quarterly results dampening sentiment.
The S&P/TSX composite index ended up 176.67 points, or 0.6%, at 28,055.43, eclipsing the record closing high it posted on August 13.
“The TSX is having a great year versus the U.S. market and that’s in the face of tariffs and all these other threats. … The Canadian market is looking like a decent place,” said Greg Taylor, chief investment officer at PenderFund Capital Management.
Canadian Prime Minister Mark Carney spoke with U.S. President Donald Trump and had “a productive and wide-ranging conversation” on trade challenges and other issues, Carney’s office said in a statement Thursday. The U.S. has increased tariffs on Canadian goods to 35% from 25% but many products are exempt under a continental trade agreement.
The Toronto market has advanced 13.5% since the start of the year compared to a gain of 8.3% for the S&P 500, helped by a heavy weighting in gold mining shares.
“The gold price has been flat for three months but the gold stocks look like they’re ready to go and seasonally they usually have a pretty good September,” Taylor said. “There’s a little bit of concern that Powell and the Fed are going to be a bit more hawkish tomorrow but once we get through that it could be setting up a decent environment for gold and real assets.”
Three Fed officials on Thursday appeared lukewarm to the idea of an interest rate cut next month, speaking ahead of Powell’s highly anticipated keynote address on Friday to the annual Jackson Hole conference in Wyoming.
The materials group, which includes gold mining shares, rose 2.1%. Energy was up 1.7% as the price of oil settled 1.3% higher at US$63.52 a barrel.
The Dow Jones Industrial Average fell 152.81 points, or 0.34%, to 44,785.50, the S&P 500 lost 25.61 points, or 0.40%, to 6,370.17 and the Nasdaq Composite lost 72.54 points, or 0.34%, to 21,100.31.
Traders have pared down bets on a 25-basis-point interest rate cut by the Federal Reserve in September to 79% from 99.9% last week, according to data compiled by LSEG.
Thin August trading volumes are likely to magnify any market moves following Powell’s comments. Volume on U.S. exchanges was 12.28 billion shares on Thursday, compared with the 17.08 billion average for the full session over the last 20 trading days.
A report Thursday indicated American business activity picked up pace in August, reflecting a complex environment for the U.S. central bank. Another report also showed July sales of existing U.S. homes unexpectedly ticked higher.
Yields on U.S. Treasuries rose following the reports, also putting pressure on stocks.
Nine of the 11 S&P 500 sectors were down, led by consumer staples, which declined 1.18% after Walmart raised its fiscal year sales and profit, driven by strong demand from shoppers across all income levels, but missed quarterly profit estimates and flagged higher costs from tariffs.
Shares of the retailer tumbled 4.5%. The spotlight was on reports from retailers, including Target and Home Depot, this week as investors gauged the impact of U.S. tariffs on consumer spending.
“There’s a bit of a mixed picture within the consumer space and there’s uncertainty in the economy – whether that’s the job market or whether that’s prices (increasing) from a tariff pass-through,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management.
A technology stocks selloff earlier this week appeared to lose some steam, but Nvidia, Meta, Amazon.com and Advanced Micro Devices still were weaker on Thursday.
The selloff signaled investor fears that tech stocks, which have soared from April lows, are overvalued, while Washington’s growing interference in the sector has also raised alarms.
Among other market movers, Coty shares plummeted 21.4% after the beauty products maker forecast lower current-quarter sales on weak U.S. spending.
Declining issues outnumbered advancers by a 1.6-to-1 ratio on the NYSE. There were 124 new highs and 46 new lows on the NYSE. The S&P 500 posted six new 52-week highs and no new lows while the Nasdaq Composite recorded 63 new highs and 101 new lows.
Reuters, Globe staff
