Canada's main stock index posted strong gains on Thursday, with the Toronto Stock Exchange's S&P/TSX Composite Index ending up 226.84 points, or 0.7%, at 34,268.27. According to reports from Reuters, the index approached the top of its range in recent weeks, driven by broad-based sectoral strength. The rally was supported by positive sentiment from potential economic deals between the United States and China, alongside domestic infrastructure spending plans. The S&P 500 and the Nasdaq posted fresh record highs as investors absorbed generally solid economic data and watched for developments from Beijing, where U.S. President Trump was engaged in a high-stakes meeting with his Chinese counterpart Xi Jinping. However, the index had faced pressure earlier in the week, with the S&P/TSX Composite Index plunging by 249 points, or 0.7%, to settle at 34,041 on Wednesday, marking its steepest decline in the week and erasing all of its week-to-date gains after three consecutive sessions of gains.
Financials emerged as the top performers, adding 1.6%, with Brookfield Corp shares surging 5.4% after the investment firm reported higher first-quarter revenue. As reported by Reuters, technology shares also contributed significantly to the rally, ending 2% higher. The positive momentum was further supported by the Nasdaq debut of chip designer Cerebras Systems, which soared 68.2% in its U.S. market debut, extending the market's unrelenting frenzy for companies seen as beneficiaries of the artificial intelligence boom. "Everybody is betting on the idea that something good is going to come out of that (meeting),," said Jay Bala, co-founder and senior portfolio manager at AIP Asset Management. Semiconductor stocks were lifted by Nvidia, which closed 4.4% higher after the U.S. cleared sales of the company's H200 chips to Chinese firms. However, other artificial intelligence-related firms including Qualcomm, Intel, Sandisk and Micron slid between 3.4% and 6.1%.
Canada unveiled a C$1 trillion ($729 billion) strategy to double the capacity of its electricity grid by 2050, citing rapidly increasing power demand and the need for energy security. According to Reuters, the energy sector ended up 1.2%, with oil prices settling 0.15% higher at $107.17 a barrel. However, materials sector declined 1.8% as gold and copper prices fell, with only this sector ending lower among the 10 major sectors tracked. Commodity prices across the board were mixed in early trading on Thursday, pointing to a flat open for the resource-heavy main TSX index.
Finning International (TSX:FTT) shares jumped 8.7% to $104.97 after the company posted record first-quarter adjusted earnings of $1.02 per share, up 7% from a year ago. Investors also cheered its 6% growth in product support revenue, record equipment backlog of $3.8 billion, and a 7.4% hike in its quarterly dividend. However, Manulife Financial shares dropped $3.60, or 5.7%, to $51.13 after the insurance company missed first-quarter profit estimates, contrasting with the positive performance of other financial sector stocks. As reported by Reuters, Canada Goose also faced pressure, ending 7.2% lower despite beating Wall Street estimates for fourth-quarter revenue. The luxury apparel retailer warned of subdued consumer spending due to growing macroeconomic uncertainty. Among the 11 major sectors in the S&P 500, tech shares led the percentage gainers, while materials suffered the steepest loss.
The rally was influenced by U.S. President Trump's high-stakes meeting with Chinese counterpart Xi Jinping in Beijing, with investors betting on potential positive developments from the diplomatic engagement. According to Reuters, portfolio manager Jay Bala noted that "everybody is betting on the idea that something good is going to come out of that (meeting)". The positive sentiment was further supported by generally solid economic data and the potential for infrastructure investment in Canada to boost the economy. Of the 10 major sectors, only materials ended lower, with the heavily weighted financials sector adding 1.6% and technology up 2%. On the corporate events front, several TSX-listed companies including H&R REIT, Americas Gold and Silver, Keyera, Quebecor, Discovery Silver, Aya Gold & Silver, Boralex, Brookfield, and Canadian Tire will announce their latest quarterly results today, which could keep their shares in focus throughout the day. The summit between Trump and Xi is intended to hash out a broad array of issues, including trade, U.S. arms sales to Taiwan and the re-opening of the Strait of Hormuz, with the waterway effectively shut down during the U.S.-Israeli war on Iran.
