TORONTO — Canada's main stock index rose Tuesday near the end of the trading day, erasing earlier losses as energy and base metals helped offset weakness in telecom, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 78.01 points at 21,953.80.
In New York, the Dow Jones industrial average was up 162.33 points at 39,331.85. The S&P 500 index was up 33.92 points at 5,509.01, while the Nasdaq composite was up 149.46 points at 18,028.76.
“It does feel like markets are drifting higher,” said Mona Mahajan, senior investment strategist at Edward Jones, noting that July is seasonally a stronger month for markets.
Equities are being helped by an easing in Treasury yields, she said.
“We had a big move higher the last few days. So I think it's welcome relief.”
Heading into the second half of the year, the tech sector continues to see momentum, added Mahajan, with the Nasdaq leading gains on Tuesday.
Tesla helped boost U.S. markets as the electric-vehicle maker saw its share price rise more than 10 per cent after reporting better spring sales than expected.
It’s possible that with U.S. elections on the horizon and just one modest correction so far this year for markets, more volatility could be on its way, said Mahajan.
“But it feels like the fundamentals remain intact in both the U.S. and Canada in the sense that inflation continues to show signs that it can moderate further from here, it feels like the economy may be cooling ... but not collapsing, per se.”
The U.S. Federal Reserve looks poised for interest rate cuts to begin, said Mahajan, while the Bank of Canada may continue to cut.
“That’s a ... pretty good backdrop for markets broadly,” she said.
Fed chair Jerome Powell spoke at a panel discussion in Portugal Tuesday, saying that data for April and May “do suggest we are getting back on a disinflationary path.”
However, he added that Fed officials still want to see CPI move further toward their two-per-cent target.
Powell’s message continues to be one of data dependence, said Mahajan. Though May’s inflation reading was promising, the central bank needs more certainty that the data is on the right track before it can make a move.
Friday’s job numbers in the U.S. will help fill out the picture, she added.
A report Tuesday showed that U.S. employers advertised more job openings at the end of May than economists expected. However, the report still continued an ongoing trend lower for job openings, noted Mahajan.
The Canadian dollar traded for 73.01 cents US compared with 73.06 cents US on Friday.
The August crude oil contract was down 57 cents at US$82.81 per barrel and the August natural gas contract was down four cents at US$2.44 per mmBTU.
The August gold contract was down US$5.50 at US$2,333.40 an ounce and the September copper contract was flat at US$4.42 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published July 2, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
