S&P/TSX composite gains 150 points led by energy stocks, U.S. stock markets also rise
Canada’s main stock index gained almost 150 points, led by strength in the energy sector, while U.S. stock markets also rose.
The S&P/TSX composite index was up 149.78 points at 20,376.57.
Markets in Canada breathed a “sigh of relief” Tuesday after the latest inflation report, said Craig Fehr, investment strategist at Edward Jones.
Inflation in June slowed to 2.8 per cent, down from 3.4 per cent in May, said Statistics Canada.
“It’s generally consistent with what we saw last week in the U.S., and I would say broadly consistent with the trends that we’ve been seeing in consumer prices for some time now,” said Fehr.
However, the fall in headline inflation was helped by the fact that energy costs are a lot lower than they were a year ago and core inflation measures aren’t quite as rosy as the headline suggests, said Fehr.
“Core inflation is still sufficiently elevated to keep the Bank of Canada on guard,” he said, but it isn’t so high as to warrant a “new, more aggressive stance” from the central bank either.
“I suspect it probably supports the case for the Bank of Canada to keep its policy rate steady for a while until it gets confirmation that core inflation continues to move lower,” said Fehr.
In New York, the Dow Jones industrial average was up 366.58 points at 34,951.93.The S&P 500 index was up 32.19 points at 4,554.98, while the Nasdaq composite was up 108.69 points at 14,353.64.
The market gains on both sides of the border Tuesday reflect confidence as inflation continues to move lower, said Fehr, adding that new economic data in the U.S. helped support the narrative that the economy is remaining resilient even as inflation moderates.
The so-called “Goldilocks scenario,” where inflation is successfully quelled
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