TORONTO — Canada's main stock index gained more than 250 points Tuesday amid a broad-based rally led by energy stocks, while U.S. markets also rose on hopes that interest rates may have reached their peak.
The S&P/TSX composite index closed up 255.13 points at 19,501.20.
In New York, the Dow Jones industrial average was up 134.65 points at 33,739.30. The S&P 500 index was up 22.58 points at 4,358.24, while the Nasdaq composite was up 78.60 points at 13,562.84.
U.S. markets rose for the second day this week as comments from U.S. Federal Reserve officials indicate the central bank could be done raising interest rates, said Anish Chopra, managing director with Portfolio Management Corp.
On Tuesday, the president of the Federal Reserve Bank of Atlanta said she doesn’t think rates need to rise any further, echoing remarks on Monday from the Fed’s vice chair and the Dallas Fed president. The central bank’s next rate decision is Nov. 1.
U.S. Treasury yields somewhat eased Tuesday after a three-day weekend for the bond market. Last week, yields reached their highest levels in more than a decade.
Longer-term bond yields have been heaping pressure on the stock market and are helping with the central bank’s fight against inflation, Chopra said: “The fact that long-term bond rates have risen means that the Federal Reserve may not need to continue raising rates.”
Market expectations are rising that the central bank won’t hike any further this year, Chopra said.
Later this week, investors will get fresh U.S. inflation data that will either support hopes for an end to the tightening cycle or surprise to the upside, throwing another potential wrench in the central bank's plans, said Chopra.
“Any surprise on the inflation front ... would give the Federal Reserve pause,” he said.
Meanwhile in Canada, the TSX gained 1.3 per cent as the energy index was up more than four per cent.
“As a result of the tension in the Middle East, you’ve got some uncertainty with respect to the supply,” said Chopra. Energy stocks have also been undervalued, he added, lending support to share prices Tuesday.
The Canadian dollar traded for 73.58 cents UScompared with 73.08 cents US on Friday.
The November crude contract was down 41 cents at US$85.97 per barrel and the November natural gas contract was up less than a penny at US$3.38 per mmBTU.
The December gold contract was up US$11.00 at US$1,875.30 an ounceand the December copper contract was down a penny at US$3.63 a pound.
-- With files from The Associated Press
This report by The Canadian Press was first published Oct. 10, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
