Canadian stocks rise amid U.S. earnings and Fed uncertainty
Canada’s main stock exchange climbed higher on Thursday as investors digested a fresh round of U.S. corporate earnings and ongoing uncertainty surrounding the leadership of the Federal Reserve.
By 12:05 ET, the S&P/TSX 60 index futures were up 11 points, or 0.72%, while the Toronto Stock Exchange’s S&P/TSX Composite Index added 157 points, or 0.58%, reaching 27,310.53.
The gains followed Wall Street’s rebound after a volatile session fueled by conflicting reports that U.S. President Donald Trump was considering removing Federal Reserve Chair Jerome Powell. Although Trump denied immediate plans to oust Powell, he continued to voice dissatisfaction with the Fed’s performance, leaving room for speculation.
In Canada, Prime Minister Mark Carney announced plans to implement a tariff rate quota targeting free trade partners, excluding the U.S., to shield the domestic steel industry.
Wall Street Edges Higher
U.S. markets also traded higher as the earnings season gathered momentum. The Dow Jones Industrial Average was up 200 points (0.45%), the S&P 500 gained 30 points (0.48%), and the NASDAQ Composite jumped 166 points (0.83%).
Investors were encouraged by strong early earnings from major banks, despite cautious guidance for the remainder of the year. Tech and consumer-focused companies also came into focus, with Netflix set to report after market close. Analysts at Vital Knowledge predicted solid results for the streaming giant but warned that short-term expectations may be overly optimistic.
Before the opening bell, reports were also expected from GE Aerospace, PepsiCo, Elevance Health, and Cintas.
Adding to investor optimism, Taiwan Semiconductor Manufacturing (TSMC) reported a record quarterly profit, driven by continued strength in artificial intelligence demand.
Eyes on U.S. Data and Fed Moves
Beyond earnings, markets were bracing for new data on U.S. retail sales and jobless claims to assess the economy’s resilience, and the potential for Federal Reserve rate cuts.
Although the Fed signalled two rate cuts for later this year during its June policy meeting, New York Fed President John Williams struck a more cautious tone on Wednesday, citing inflationary pressure and economic uncertainty as reasons to hold off for now.
The Fed’s Beige Book also highlighted moderate economic growth in June and early July, while trade tensions and tariffs continue to cloud the outlook.
Oil Prices Stabilise
Crude oil prices steadied after three straight days of losses, supported by upbeat economic data from major oil-consuming nations.
As of 12:05 ET, Brent crude rose 0.74% to $69 per barrel, while U.S. West Texas Intermediate gained 1.22% to $67.19. A sharp drawdown in U.S. oil inventories and strong demand from China helped boost sentiment.
According to the Energy Information Administration, U.S. crude stocks dropped by 3.9 million barrels last week, more than expected, pointing to increased refinery activity and tighter supply.
Gold Dips Slightly
Gold prices edged lower as improved investor sentiment reduced safe-haven demand, following Trump’s reassurances about Powell. However, ongoing geopolitical uncertainty kept a floor under gold prices.
Spot gold slipped 0.32% to $3,336.90 an ounce, while September gold futures dropped 0.5% to $3,342.37.