TSX higher after BoC maintains key rate
Investing.com – Canada’s main stock indexes enjoyed gains on Thursday, after a day of tech sector selloffs, U.S. Fed Chair Jerome Powell’s comments, and the Bank of Canada’s decision to maintain the key rate.
As of 1:00 ET, the S&P/TSX 60 Futures was up 10.8 points or 0.75%, having inched upward by 0.05% in the previous session.
The S&P/TSX Composite index also rose slightly by 170.1 points or 0.7%, after a modest gain of 39 points or 0.2% on Wednesday.
The Bank of Canada (BoC) announced on Wednesday its decision to maintain the policy interest rate at 2.75%, aligning with consensus expectations. This decision comes after a series of seven consecutive rate cuts, the most recent being a 25 basis point reduction in March from 3.00% to the current rate.
In response to the announcement, CIBC (TSX:CM) Economics’ Avery Shenfeld commented, "We see this as a pause, one tied to the Bank’s lack of clarity on the outlook ahead, rather than the end of the easing cycle, unless the tariff threat disappears in short order."
In Thursday’s news, Trump criticized the Fed’s Powell for his cautious stance on monetary policy. Trump referred to Powell as "Too Late" in his post, stating that "Powell’s termination cannot come fast enough!" The President has been an advocate for the U.S. Central Bank cutting rates, sharing his belief that the Fed should have already lowered rates earlier in the year.
On Wednesday, Fed Chair Powell said that the Fed was not inclined to cut interest rates in the near future, citing the inflationary pressures and economic uncertainties introduced by the new tariffs.
U.S. stocks mixed
U.S. Stock indexes were mixed after opening Thursday, as the tech sector looked to bounce back from a tough Wednesday session, and investors digested Trump’s escalating criticism of Powell.
At 1:00 ET, the S&P 500 was up 44.1 points or 0.8%, and the Nasdaq Composite was up 44 points, or 0.25%. Conversely, The Dow Jones Industrial fell 255.4 points or 0.6% in afternoon trading.
In Wednesday’s trading the Dow Jones Industrial Average fell 700 points or 1.7%, the S&P 500 declined 121 points or 2.2%, and the NASDAQ Composite plummeted 516 points or 3.1%.
NVIDIA Corporation (NASDAQ:NVDA) led the losses on Wednesday, after the semiconductor giant declared it would be hit by $5.5 billion in charges following a Commerce Department decision to limit exports of its H20 AI chip to its key Chinese market. The stock fell 6.9% on the day, pricing in at $104.49 per share.
U.S. President Donald Trump declared "big progress" in negotiations with Japan in Washington late Wednesday. Japan was the first major trading partner to negotiate directly with the United States, earning the administration’s praise.
Trump is slated to meet with Italian Prime Minister Giorgia Meloni to negotiate tariffs.
Crude continues gains
Oil prices rose on Thursday, following gains in the prior session. The slight rebound for the commodity comes amidst a previous selloff, due to investor panic on the likely effect of the trade uncertainty on global growth.
The International Energy Agency on Tuesday joined the Organization of the Petroleum Exporting Countries in cutting its forecast for global oil demand this year, citing Trump’s tariffs on trading partners and their retaliatory moves.
By 1:00 ET, Crude Oil WTI Futures was up 3.6% to $64.73 per barrel, while Brent Oil Futures gained 3.2% to $67.97 a barrel.
Gold falls after hitting record high
Gold prices were falling slightly on Thursday, having touched a fresh record high, benefiting from sustained safe haven demand as markets eyed U.S.-China trade tensions.
Spot gold advanced to an all-time peak of $3,357.84 per ounce. Gold futures also hit a record high of $3,371.89/oz.
As of 1:10 ET, XAU/USD was trading down 0.7% to $3,318.57, and Gold Futures were down 0.4% to $3,331.29.
(Scott Kanowsky also contributed to this article)
