TSX Rises to Record on Softer US Inflation

The S&P/TSX Composite Index added 0.5% to close at an all-time high of 36,662 on Wednesday, extending its recent record-breaking streak. US CPI inflation eased slightly to 3.4% in July from 3.5%, in line with forecasts. Combined with soft labor market data from July, the in-line inflation reading reinforced expectations that the Fed will refrain from hiking rates, benefiting credit-sensitive North American equities. Meanwhile, the BoC is widely expected to keep interest rates unchanged at its September meeting. Major banks traded higher, with RBC up 1.5% and TD Bank adding 1.7%. Most miners advanced amid higher gold prices, with Agnico Eagle rising 1.8% and Barrick advancing 3%. In contrast, Franco-Nevada fell 1.6% after missing earnings expectations. In tech, Celestica surged 9.2% amid a chipmaker rally in the US. Constellation Software tumbled 4.5% after revenue came in slightly below forecasts despite an EPS beat. Shopify fell 1.2%, tracking weakness in US hyperscalers.

The S&P/TSX Composite Index edged higher to trade above 36,500, extending its recent record-breaking streak. US CPI inflation eased slightly to 3.4% in July from 3.5%, in line with forecasts. Combined with soft labor market data from July, the in-line inflation reading reinforced expectations that the Fed will refrain from hiking rates, benefiting credit-sensitive North American equities. Meanwhile, the BoC is widely expected to keep interest rates unchanged at its September meeting. Major banks traded higher, with RBC, TD Bank and BMO gaining more than 0.5%, while CIBC and Scotiabank rose nearly 1%. Most miners advanced amid higher gold prices, with Agnico Eagle and Barrick up more than 1.5%. Franco-Nevada fell 3% after missing earnings expectations. Constellation Software tumbled near 7% after revenue came in slightly below forecasts despite an EPS beat. Hydro One gained 2% after reporting higher profit, while Metro fell 2% after reporting weaker adjusted earnings in fiscal Q3.

The S&P/TSX Composite Index futures inched higher on Wednesday amid a fresh batch of corporate earnings reports and July's US inflation data. Constellation Software reported higher second-quarter net income and beat EPS estimates. Franco-Nevada posted second-quarter profit of $354 million and adjusted earnings of $1.81 per share, missing expectations. Markets also awaited quarterly results from Metro, Hydro One and other companies. Headline US inflation eased slightly to 3.4% in July from 3.5% in June, in line with forecasts. Combined with soft labor market data from July, the in-line inflation reading could support expectations for a more dovish Fed, benefiting credit-sensitive North American equities. Meanwhile, the Bank of Canada is widely expected to keep interest rates unchanged at its September meeting.