Canada’s main stock index saw a significant jump of almost 300 points on Monday, driven by a broad-based rally in most sectors. The S&P/TSX composite index ended the day up 1.36% at 21,848.59, with the energy sector leading the gains with a rise of over three percent. This rally marked a reversal for Canadian equities, which have been under pressure compared to the U.S. in recent weeks. This positive movement could be attributed to investors anticipating potentially positive news on the inflation front as Statistics Canada is set to release its latest consumer price index report.
Meanwhile, U.S. stock markets saw a mixed day, with the Dow Jones industrial average up 260.88 points at 39,411.21, the S&P 500 index down 16.75 points at 5,447.87, and the Nasdaq composite down 192.54 points at 17,496.82. Technology stocks related to computer chips were the main drag on the market, with Nvidia Corp. dropping over eight percent and causing a significant market capitalization loss. The drop in the U.S. market could be linked to profit-taking and a market reset after recent strong gains, according to Kevin Headland, the chief investment strategist at Manulife Investment Management.
The Information technology index on the TSX was down about half a percent, with Celestica Inc. down almost five percent, while financials gained 1.7 percent, telecoms were up 1.1 percent, and utilities were up 2.4 percent. The tech sell-off and profit-taking may have also affected bitcoin, which was down over seven percent. The Canadian dollar traded for 73.19 cents US, slightly higher than Friday’s rate. The loonie has remained relatively stable after the Bank of Canada’s interest rate cut in June, with expectations of continued rate cuts in July if inflation data remains in line or improves.
In the commodities market, the August crude oil contract was up 90 cents at US$81.63 per barrel, and the August natural gas contract was up eleven cents at US$2.95 per mmBTU. The August gold contract was up US$13.20 at US$2,344.40 an ounce, while the September copper contract remained unchanged at US$4.43 a pound. Overall, the market movements on Monday reflected a mix of positive momentum for Canadian stocks and a slight pullback in the U.S. market due to profit-taking and specific sector weakness.
Overall, Monday’s market activity saw a strong rally for Canada’s main stock index, driven by gains in most sectors outside of technology. This rally marked a reversal from recent weeks of pressure on Canadian equities compared to the U.S. market. The U.S. market, on the other hand, experienced a mixed day with technology-related stocks dragging down the indices. According to experts, the drop in the U.S. market could be attributed to profit-taking and a market reset following strong gains. Moving forward, investors are anticipating potential positive news on the inflation front from Canada’s upcoming consumer price index report.
