Canada's main stock index opened higher on Wednesday after U.S. consumer prices data showed signs of cooling inflation ahead of the Federal Reserve's rate verdict, while rising commodity prices also provided support.
The S&P/TSX Composite Index rebounded 178.31 points to open mid-week Wednesday at 21,065.65.
The Canadian dollar surged 0.31 cents to 73.01 cents U.S.
Canadian utility and real estate shares are likely to be among the biggest beneficiaries of the Bank of Canada's move to begin cutting interest rates, according to investors.
In corporate news, National Bank of Canada is set to acquire Alberta-based rival Canadian Western Bank for $5 billion combining the country's sixth- and eighth-largest lenders, respectively. National shares dumped $6.61, or 5.3%, to $110.18, while those for Canadian Western zoomed $18.00, or 72.3%, to $42.89.
Bank of Canada Governor Tiff Macklem is expected to speak at the Conference of Montreal at 3:30 p.m. ET.
ON BAYSTREET
The TSX Venture Exchange recovered 5.72 points, or 1%, to 582.88.
All 12 subgroups were positive in the first hour, led by real-estate, up 1.4%, consumer discretionary stocks, ahead 1.3%, and information technology, up 1.1%.
ON WALLSTREET
Stocks jumped on Wednesday after inflation slowed in May, sending yields tumbling before the Federal Reserve’s June interest-rate decision.
The Dow Jones Industrials restocked 267.75 points to kick off Wednesday’s session at 39,015.17.
The S&P 500 index popped 60.64 points, or 1.1%, to 5,435.01, a fresh record.
The NASDAQ leaped 284.85 points, or 1.6%, to 17,628.40, also a new high.
Stocks that have been under some pressure lately on concern higher rates were suffocating the economy, turned higher following the light CPI report and subsequent slide in yields. Bank of America and other financial shares increased. Home Depot and Lowe’s jumped.
Nvidia, Broadcom and other technology shares also gained as the cooler inflation figures renewed investors’ risk appetites.
Shares of Oracle jumped 12% as traders fixated on the software maker’s newly announced cloud deals with Google and OpenAI, overlooking misses in the company’s latest quarter.
The consumer price index was unchanged for the month of May, lower than the Dow Jones estimate for a 0.1% monthly increase. Year over year, the inflation yardstick increased 3.3%, which also came in below expectations and represented a slowing from the prior 3.4% pace.
Monthly and yearly numbers for core CPI, which excludes the volatile prices associated with energy and food, were also lower than anticipated.
Prices for the 10-year Treasury hiked, lowering yields to 4.28% from Tuesday’s 4.40%. Treasury prices and yields move in opposite directions.
Oil prices prospered $1.28 to $79.18 U.S. a barrel.
Gold prices were brighter $16.10 to $2,342.70
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