TSX extends rally as yields decline and commodity prices rise

Canadian stocks climbed on Thursday as falling bond yields and rising commodity prices boosted investor sentiment, while markets also weighed evolving U.S. tariff policies.

The Toronto Stock Exchange’s S&P/TSX Composite Index climbed 0.5% to 24,604.05 points, and was on course for the third successive daily gain.

The heavily weighted energy sector added 0.6% as oil prices recovered some losses on Thursday.

Materials also climbed 0.6% after gold prices rebounded, as investors bought bullion following a sharp decline in the previous session.

“Any sign of commodities stabilizing, I think is a good sign in today’s market,” said Michael Sprung, president at Sprung Investment Management.

Canadian government bond yields fell across the curve with 10-year bond yields falling 5.8 basis points to 3.191%.

Falling yields, which reduce the risk-free rate benchmark, decrease borrowing costs and enhance the value of companies’ future cash flows.

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Among index sectors, information technology rose over 1%; electronics manufacturer Celestica led sector gains at 5%. Healthcare stocks advanced 1.3%, buoyed by cannabis producer Tilray Brands, which surged 4%

On the flip side, consumer staples lost the most, falling 0.4%.

China on Thursday called for all “unilateral” U.S. tariffs to be canceled, as signs emerged that the Trump administration may de-escalate its trade war with Beijing.

On Wednesday, TSX had climbed to a three-week high as some optimism took hold of a letup in the global trade war.

However, later that day, Trump said a 25% tariff on cars imported from Canada to the United States could go up.

Investors’ attention was also divided among a series of earnings reports from U.S. companies, which presented a mixed picture.

Among domestic earnings, miner Teck Resources beat first-quarter expectations, helped by higher commodity prices and copper sales volumes. Its shares rose 3.8%.