TSX Futures Rise as US PCE Inflation Undershoots Forecast

The S&P/TSX Composite Index was near flat on Wednesday as losses in banking partially offset gains in mining and energy producers. Oil prices rebounded amid uncertainty over US-Iran negotiations, supporting energy producers but pressuring credit-sensitive sectors as persistent energy-driven inflation concerns remained. Canadian Natural, Imperial Oil and Cenovus rose about 1%, while Suncor added 1.5%. Most major banks traded below the flatline. Meanwhile, gold prices rose, lending support to mining shares, with Franco-Nevada gaining 4%. US PCE inflation came in slightly below estimates, easing some concerns over further interest rate hikes by the Fed and BoC. The personal consumption expenditures price index rose 3.4% year over year, below forecasts of 3.7%. The softer-than-expected reading limited losses in the financial sector as Fed officials continued to monitor inflation and spending data.

Futures tracking Canada’s main stock index rose on Wednesday as US PCE inflation came in slightly below estimates, easing some concerns over further interest rate hikes by the Fed and BoC. The Federal Reserve’s preferred inflation gauge, the personal consumption expenditures price index, increased 3.4% year-on-year, below forecasts of 3.7%. Fed officials are closely monitoring inflation and spending data as they weigh when to raise rates again. The softer than expected inflation reading eased some pressure on credit-sensitive stocks. Meanwhile, gold prices rose, lending support to mining shares. Oil prices rebounded amid uncertainty over US-Iran negotiations, supporting energy producers but pressuring credit-sensitive sectors as persistent energy-driven inflation concerns remained. Elsewhere, caution toward the tech sector is expected ahead of Micron’s fiscal fourth-quarter earnings, due after the closing bell.

The S&P/TSX Composite Index inched lower to close at 35,460 on Tuesday following subdued GDP data and as a US ban on multiple Canadian imports came into force. Advance information showed that real GDP increased 0.2% in August, with gains in mining and quarrying and retail trade partly offset by a decline in oil and gas extraction. GDP was essentially unchanged in July. The US ban on various Canadian goods, including many alcoholic beverages and dairy products, also took effect, with Saputo losing 2%. Major banks posted losses, with RBC down 0.6%. Meanwhile, oil prices pulled back as US and Iranian officials continued separate discussions with mediators. Energy producers retreated, with Canadian Natural down 0.7% and Suncor falling 1.7%. In contrast, miners rebounded from yesterday’s losses as gold prices rose, with Agnico Eagle gaining 1.1% and Franco-Nevada up 0.9%. Tech stocks also gained as the planned Anthropic IPO on Wall Street lent support to the sector, with Shopify up 2.9%.