Wall Street rises as materials and crypto stocks offset continued bond sell-off
Investing.com - Canada’s main stock index closed at a record high for a third straight session on Wednesday, as gains in mining and technology shares and an in-line U.S. inflation reading bolstered risk appetite and eased concerns about a Federal Reserve rate hike next month.
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Canada’s main stock exchange the S&P/TSX composite index closed 0.51% higher and touched a new 52-week high of 36,662.14.
The index’s advance came as investors weighed quarterly results from Canadian companies Constellation Software earnings that posted a rise in second-quarter net income, while Air Canada restored its annual core profit target, albeit at a lower level than its previously suspended outlook. Markets also digested quarterly results from Metro and Hydro One, among others, while Statistics Canada reported building permits rebounded by $2.3 billion — a gain of 18.5% — to reach $14.9 billion.
The biggest gainers of the session on the S&P/TSX Composite were Air Canada (TSX:AC), which rose 12.25% or 3.34 points to trade at 30.61 at the close. Celestica Inc. (TSX:CLS) added 9.20% or 39.79 points to end at 472.51 and Exchange Income Corporation (TSX:EIF) was up 5.66% or 7.25 points to 135.43 in late trade.
Canadian bond yields also declined across the curve on Wednesday while the loonie traded near a two-month high following U.S. inflation data that lowered expectations for a Federal Reserve interest rate increase next month.
The 10-year yield dropped 2.3 basis points to 3.685%. The benchmark had reached 3.755% on Tuesday, matching its highest level since May 2024.
Canada’s 10-year yield has risen approximately 17 basis points over the past month, the largest increase among G7 sovereign debt. Jobs, trade and GDP data pointed to recovery in the domestic economy after a slow start to the year. The 2-year yield increased 16 basis points during the same period.
U.S. stocks higher
U.S. stocks closed mostly higher on Wednesday after July consumer inflation figures came in-line with expectations, prompting traders to pare Federal Reserve rate hike expectations. Meanwhile, oil prices seesawed as President Donald Trump said the U.S. had "total control" over the Strait of Hormuz, even as Iran reiterated its own control over the vital waterway.
The benchmark S&P 500 index climbed 0.3% to settle at 7,749.19 points, while the tech-heavy NASDAQ Composite advanced 0.5% to conclude at 26,588.49 points. The blue-chip Dow Jones Industrial Average finished just under the flatline at 53,770.16 points.
The focus was squarely on the July consumer price index (CPI) report for further cues on monetary policy outlook. The data comes after a weaker-than-expected July jobs report on Friday led to a rapid recalibration in Fed rate hike odds for September.
Annualized U.S. consumer price growth cooled slightly as expected in July, according to key data on Wednesday that will likely be closely watched by Federal Reserve policymakers tasked with calibrating interest rates.
In the twelve months to July, the U.S. consumer price index eased to 3.4% from 3.5% in June, in line with projections. Month-on-month, headline CPI from the Labor Department rebounded as anticipated to 0.1%, after having slid by 0.4% previously.
Wagers for the Fed’s September decision have been a toss-up and appeared to remain largely so following the inflation report. Investors now see a roughly 56% chance that the Fed will opt to keep rates steady in September, while 44% are anticipating a quarter-point hike, according to CME FedWatch.
Scott Kanowsky contributed reporting.
