TSX gains as investors assess US inflation data

Canada’s main stock index rose on Tuesday, led by gains in technology stocks, as investors assessed U.S. inflation data and its impact on monetary policy outlook.

The Toronto Stock Exchange’s S&P/TSX composite index was up 0.5% at 25,655.67 points.

The U.S. consumer prices rebounded moderately in April, rising 0.2% after a 0.1% dip in March, with inflation expected to pick up in the coming months as tariffs boost import costs.

Following the report, traders leaned into bets that the Federal Reserve would hold off on lowering interest rates until September, while still anticipating two 25-basis-point cuts by year’s end.

“Canadian investors are cautiously optimistic, eyeing U.S. inflation data showing tariff-driven price hikes. The TSX may face mild volatility, but sentiment is buoyed by expectations of Bank of Canada rate cuts. The data’s impact today will be notable but not dominant”, said Graham Priest, investment advisor at BlueShore Financial.

TSX gains on US-China tariff agreement

Meanwhile, the U.S. and China on Monday said they would pause their trade war for 90 days, bringing down reciprocal duties and removing other measures while they negotiate a more permanent arrangement.

“The US-China tariff reduction fueled Monday’s TSX surge, but today’s sentiment may temper as investors weigh the 90-day truce’s fragility, persistent trade uncertainties and domestic economic pressures”, added Graham.

Meanwhile, U.S. Trade Representative Jamieson Greer said a 10% universal tariff on goods entering the United States would stay in place but officials were in talks with many countries to lower additional tariffs imposed.

On TSX, information and technology stocks gained 1.4%, in line with the tech-heavy Nasdaq Composite, while energy stocks advanced 0.9%, tracking gains in oil prices.

In corporate new, WonderFi is up 35.3%, after retail trading platform Robinhood said it will buy the Canadian crypto firm for C$250 million ($178.98 million).