Canadian stocks rise with election certainty; Wall Street holds steady before US earnings reports
On Monday, Canada’s main stock index rose while Canadians cast their votes, as reported by The Globe and Mail.
Investors bet that the market would benefit from gaining more clarity on the country’s economic policies once election results are known.
The S&P/TSX Composite Index advanced 88.08 points, or 0.4 percent, to close at 24,798.59. This marked the first time since April 2 that it closed above its 2024 year-end level, supported by hopes of easing tensions in the global trade war.
Polling suggested the ruling Liberal Party was expected to secure the most seats, but the main opposition Conservative Party had recently narrowed the gap.
Both major parties proposed sweeping measures aimed at boosting economic growth, leading to expectations that the country would elect a more business-friendly government than in previous years.
Shiraz Ahmed, senior portfolio manager and founder of Sartorial Wealth at Raymond James, said, “The Canadian economy wants certainty.”
He added, “With the lingering uncertainty, regardless of what candidate wins, we will have that party’s policies, which will give some economic certainty from a domestic policy standpoint.”
Financials, technology, and energy sectors each rose 0.4 percent. Energy stocks gained even though oil prices fell 1.5 percent, settling at US$62.05 a barrel due to ongoing concerns about demand.
Gold prices increased by 1 percent, lifting metal mining shares and pushing the materials group up 0.3 percent.
Meanwhile, industrials declined 0.5 percent as railroad shares weakened, and healthcare dropped 1.4 percent.
In the United States, Wall Street closed a volatile session with little change.
The S&P 500 edged up slightly, pressured by losses among megacap stocks as investors awaited key economic data and earnings reports from major US companies.
Nvidia and Amazon weighed on the S&P 500, falling 2.1 percent and 0.7 percent, respectively, which also pushed the Nasdaq lower.
According to The Wall Street Journal, China’s Huawei Technologies prepared to test its own artificial-intelligence processor, which could replace some of Nvidia’s high-end products.
Among the ‘Magnificent Seven stocks,’ Amazon, Apple, Meta Platforms, and Microsoft are scheduled to report quarterly results later this week. Apple rose 0.4 percent, and Meta climbed 0.5 percent, partially offsetting the declines in Nvidia and Amazon.
The Dow Jones Industrial Average added 114.09 points, or 0.28 percent, to 40,227.59.
The S&P 500 increased by 3.54 points, or 0.06 percent, to 5,528.75, while the Nasdaq Composite fell 16.81 points, or 0.10 percent, to 17,366.13.
The S&P 500 posted its fifth consecutive daily gain, the longest streak since early November.
LSEG data indicated that first-quarter earnings for S&P 500 companies are expected to grow 10.9 percent compared to a year ago.
However, many companies warned of uncertainty tied to US trade policy, with some reducing or withdrawing forecasts.
Out of 179 S&P companies that have reported results, 78 issued negative earnings outlooks and 32 offered positive forecasts, yielding a 2.4 ratio slightly lower than the 2.6 recorded a year earlier, according to LSEG.
Investors are also focusing on upcoming US economic reports, including the personal consumption expenditures price index and a series of labour market data that will culminate in the monthly US payrolls report on Friday.
Stocks opened higher but faced a choppy session. The S&P 500 and Nasdaq briefly touched their highest levels since April 2, just before Trump’s tariff announcement.
Although optimism about potential trade agreements between the US and trading partners, particularly China, has recently stabilized markets, uncertainty over Sino-US negotiations continues to keep investors cautious.
The S&P 500 remains roughly 10 percent below its February record high as markets await signs of the extent of tariff impacts.
Among individual US stocks, Boeing gained 2.4 percent after Bernstein raised its stock rating and price target, helping keep the Dow in positive territory. Spirit AeroSystems advanced 2.6 percent following a deal with Airbus to take over some of its plants.
On the New York Stock Exchange, advancing issues outnumbered decliners by a 2-to-1 ratio, while on the Nasdaq the ratio was 1.27-to-1. The S&P 500 registered three new 52-week highs and two new lows.
The Nasdaq Composite reported 47 new highs and 53 new lows. Trading volume on US exchanges totalled 17.05 billion shares, compared to the 20-day average of 19.26 billion shares.
