S&P/TSX composite ekes out gain, U.S. stock markets rise

Canada’s main stock index just eked out a gain Thursday, buoyed by energy and metals stocks, while U.S. stock markets rose.

It was the day after the Federal Reserve paused interest rates but signalled more hikes were likely this year in the central bank’s ongoing fight against inflation.

“I think yesterday’s meeting, although it happened mid-day, probably still set the backdrop for today’s trading as people digest the news from policymakers,” said Ryan Crowther, vice-president and portfolio manager at Franklin Templeton Canada.

The S&P/TSX composite index was up 12.26 points at 20,027.35.

In New York, the Dow Jones industrial average was up 428.73 points at 34,408.06. The S&P 500 index was up 53.25 points at 4,425.84, while the Nasdaq composite was up 156.34 points at 13,782.82.

The broad-based rally saw the S&P 500 post the biggest gain yet in its recent streak, rising 1.2 per cent Thursday. The Nasdaq gained 1.1 per cent while the Dow gained 1.3 per cent.

It wouldn’t have been surprising to see a sell-off this morning in the U.S. as investors continued to digest the news, but that’s not what happened, said Crowther.

Instead, “the market’s essentially shrugging off policymakers’ hawkish stance,” said Crowther.

“We’re just still seeing a market that’s pricing in very little risk, probably pricing in a soft landing scenario, or better than a soft landing scenario. That’s still pretty glass-half-full on what’s to come.”

Investors got a mixed bag of economic data in the U.S. Thursday. Retail sales pulled higher last month, even though economists were expecting a decline, while applications for jobless claims remained elevated last week and a report said manufacturing activity in the mid-Atlantic region saw its 10th straight month of contraction.

“It’s still a mixed picture in terms of economic data, but leaning definitely towards a deterioration. And the inflation picture also is a mixed bag,” said Crowther.

Meanwhile in Canada, energy propped up the TSX as oil climbed past US$70 again, gaining more than three per cent.

“Without that, Canada would actually be ? negative for the day,” said Crowther.

The Canadian dollar traded for 75.46 cents UScompared with 75.20 cents US on Wednesday.

The August crude contract was up US$2.35 at US$70.81 per barrel and the July natural gas contract was up 19 cents at US$2.53 per mmBTU.

The August gold contract was up US$1.80 at US$1,970.70 an ounce and the July copper contract was up three cents at US$3.90 a pound.

— With files from The Associated Press