Canada’s main stock index rose on Friday as higher gold prices boosted metal mining shares, but gains for the index were kept in check as investors worried about the inflationary impact of the AI boom. Wall Street ended mixed.
The Toronto Stock Exchange’s S&P/TSX Composite Index ended up 129.79 points, or 0.4%, at 34,980.00. For the week, the index added 0.4%.
The materials sector, which includes metal miners, was up 1%. It was the second straight day of gains for the sector after it traded near the bottom of its range this year on Wednesday.
The price of gold rose 1% as the U.S. dollar gave back some of its recent gains.
Technology added 1.2%, with shares of e-commerce company Shopify Inc adding 4.6%. Industrials were up 0.7%, while real estate ended 1.6% higher. The two most heavily weighted sectors edged lower. Financials lost 0.2% and energy was down 0.3%.
The price of oil settled 3.7% lower at $69.23 a barrel, adding to its steep weekly decline, as as oil tankers kept exiting the Strait of Hormuz, easing supply concerns.
The TSX was headed for a 6.8% gain in the second quarter, which would be its eighth straight quarterly advance.
Domestic data was downbeat, with a preliminary report showing that wholesale trade fell 0.7% in May from April.
On Wall Street, the S&P 500 ended marginally lower, with a steep drop in AI-related chip stocks and sharp gains in Moderna and other healthcare stocks.
The PHLX chip index tumbled 5.3%, underscoring recent volatility among AI-related chipmakers that have fueled much of Wall Street’s gains in recent years. While some investors remain optimistic about the potential for AI to fuel higher profits, others worry that massive spending to build AI data centers may take too long to pay off.
“It’s too early to conclude that there’s a major correction brewing in tech, but what I would say is that the questions around profitability and the capex story are certainly not going away,” said David Stubbs, chief investment strategist at AlphaCore Wealth Advisory.
Stubbs also warned that Wall Street could be vulnerable to signs that U.S. companies may not be able to deliver on investors’ high earnings expectations. Apple rallied 3.1% and partly rebounded from a selloff on Thursday, when it raised iPad and MacBook prices, blaming soaring memory and storage chip costs.
Moderna surged almost 13% to its highest level since 2024 after the drug developer hosted an investor event and showcased its pipeline.
Eight of the 11 S&P 500 sector indexes declined, led lower by industrials, down 3.41%, followed by a 2.45% loss in materials. U.S. inflation rose above 4% in May, data showed on Thursday, as the Iran war drove up energy prices, keeping alive the possibility of a Fed rate hike.
While oil prices have retreated sharply as the Middle East tensions eased, Apple’s newly announced price hikes suggest inflation remains a concern, said Art Hogan, chief market strategist at B. Riley Wealth.
“We saw a similar dynamic during the pandemic, when supply chain disruptions limited access to semiconductors. Now, we’re witnessing a comparable supply shock, this time driven by memory, which is creating renewed inflationary pressure,” Hogan said.
The S&P 500 declined 0.05% to end the session at 7,353.95 points. The Nasdaq declined 0.24% to 25,297.62 points, while the Dow Jones Industrial Average declined 0.09% to 51,876.11 points.
For the week, the S&P 500 fell 2.05% and the Nasdaq lost 4.7%.
The chip index lost 7.9% for the week, its worst week since early April. A report that OpenAI was considering delaying its public debut until next year also weighed on risk sentiment related to AI stocks.
Shares of SpaceX edged up 0.15%. Passively managed index funds need to buy billions of dollars’ worth of the stock ahead of its inclusion in Russell indexes.
Meanwhile, interest rate concerns persisted, with traders pricing in one 25 basis-point rate hike and a near 27% chance of another by year-end, according to LSEG-compiled data.
A survey showed U.S. consumer sentiment rebounded from record lows in June, though households remained worried about the high cost of living.
ON Semiconductor dropped almost 24% after agreeing to acquire Synaptics in an all-stock deal valued at about $7 billion. Synaptics dipped 3.7%.
Advancing issues outnumbered falling ones within the S&P 500 by a 1.8-to-one ratio. The S&P 500 posted 35 new highs and 5 new lows; the Nasdaq recorded 263 new highs and 169 new lows. Volume on U.S. exchanges was relatively heavy, with 30.1 billion shares traded, compared with an average of 23.1 billion shares over the previous 20 sessions.
Reuters, Globe staff
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