Canadian Stocks Gain as Fed Hike Bets Ease

The S&P/TSX Composite Index edged up to trade near the 35,000 mark on Thursday as investors assessed the latest US payrolls report for signals on the Fed's policy path. A weaker-than-expected labor market reading reduced expectations of further Fed rate hikes this year. Meanwhile, oil prices extended losses and remained near pre-conflict levels, easing inflation concerns and reinforcing expectations that the BoC may adopt a more dovish stance. Geopolitical tensions remained in focus after Iran and the US concluded a round of indirect talks in Doha without a clear breakthrough, although concerns over disruptions in the Strait of Hormuz continued to ease. Financial stocks traded mixed, with Brookfield gaining over 0.5% while TD Bank fell nearly 1%. Gold prices edged higher, lending support to mining stocks, with Barrick and Franco-Nevada rising more than 3% and WPM adding 3.5%. Shopify jumped over 5% after reaching a settlement with Shopline, a company owned by Joyy.

Futures tracking the S&P/TSX Composite Index were little changed on Thursday as investors assessed the latest US payrolls report for signals on the Federal Reserve’s policy path. A weaker-than-expected labor market reading reduced expectations of further Fed rate hikes this year. Oil prices extended losses and remained near pre-conflict levels, easing energy-driven inflation concerns and reinforcing expectations that the Bank of Canada may take a more dovish stance. Geopolitical tensions remained in focus after Iran and the US concluded another round of indirect talks in Doha without a clear breakthrough, although concerns over disruptions in the Strait of Hormuz continued to ease. Gold prices also edged higher, lending support to mining stocks. On trade, the US rejected an early renewal of the USMCA, keeping the agreement in force under its current framework, with annual reviews continuing until its scheduled expiration unless member countries agree on revisions.

The S&P/TSX Composite Index inched up 0.1% to close at 34,857 on Tuesday as investors assessed GDP data and developments in the Middle East. Canada’s economy rebounded more than expected in April after a mild contraction in March, while an advance estimate pointed to a further 0.1% monthly expansion in May, signaling that growth may be stabilizing. The data improved the outlook for corporate earnings and eased concerns over a deeper tariff-driven slowdown. Meanwhile, US envoys in Doha said they would not meet with Iran, raising doubts over efforts to resolve the conflict and reopen the Strait of Hormuz, though technical talks on regional security are expected this week. Oil prices remained below recent highs, helping ease inflation concerns. Financial stocks advanced, with RBC up 1% and TD Bank gaining 0.8%. Mining stocks were mixed as gold prices fluctuated, with Agnico Eagle Mines rising 0.9% and Barrick slipping 0.6%. In tech, Celestica jumped 6.1%, tracking Wall Street’s rally.