TSX Approaches Record High

Canada's S&P/TSX Composite index rose nearly 1% to over 35,000, approaching the record high from Monday and outperforming US counterparts due to strong support from miners and heavyweight banks. Energy costs pulled back as markets assessed the validity of a ceasefire between Lebanon and Israel, which could lead to a an agreement between Iran and the US. The development lowered yields and lifted gold prices, supporting miners traded in Toronto. Agnico Eagle and Barrick both jumped more than 3%. In turn, the drop in yields drove banks to enjoy some respite as high credit costs have driven lenders to set more capital aside for provisions. RBC, TD, and BMO added close to 1%. The domestic labor market data due tomorrow is expected to be muted and consolidate bets of no rate changes by the Bank of Canada this year.

Canadian equity futures were flat on Thursday amid the lack of progress in the conflict between Iran and the US and fresh weakness in US counterparts. Reports of repeated clashes between Lebanon and Israel strained the ceasefire between both parties as Tehran and Washington were not any closer to lifting their blockade on tankers that would bring relief to pro-inflationary pressures globally. Data to be released tomorrow is expected to extend the current fragility in the Canadian labor market, with net employment and the unemployment rate set to remain unchanged after the stall in the GDP last quarter. Shopify was due to open lower premarket after poor earnings by US tech companies. Also, oil companies were due to ease on lower oil prices. Still, the rebound in gold prices aided miners traded in Toronto.

The S&P/TSX Composite Index fell 1% to close at 34,801 on Wednesday, retreating from the record high reached in the previous session as renewed hostilities between the US and Iran dampened hopes for a peace deal. Tensions escalated after Iranian attacks targeted Kuwait and Bahrain, while the US carried out strikes near the Strait of Hormuz. Oil prices rose, reviving concerns about energy-driven inflation and higher borrowing costs. Financial stocks traded lower, with BMO down 1.5%, while Brookfield lost 3.4% after announcing a joint venture with a Concert Properties affiliate involving an industrial portfolio valued at roughly $1 billion. Mining shares also weighed on the index as gold prices declined, with Agnico Eagle falling 3.6%, Barrick losing 2.5%, and WPM shedding 3.5%. Technology stocks followed losses on Wall Street, with Shopify down 3% and Constellation Software retreating 4.7%.