Canada’s main stock index rose to a record high on Tuesday after U.S. President Donald Trump said at the G7 summit that Washington’s deal with Tehran was moving ahead.
At 10:42 a.m. ET, the Toronto Stock Exchange’s S&P/TSX Composite index was up 40.65 points, or 0.12 per cent, at 35,316.22.
The interim agreement would extend a tenuous ceasefire announced in April by another 60 days and reopen the Strait of Hormuz, which has been effectively blocked since February, after U.S.-Israeli strikes against Iran.
“The Middle East conflict deal is definitely supporting markets, and the rally is based on hopes that a final signing will happen, but it is more of a memorandum of understanding, not an official document, with key details still to be discussed,” said Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth.
The materials index, which includes stocks of metal miners, was up 2.2 per cent, leading gains on the resource-heavy TSX. SSR Mining, NovaGold Resources and Seabridge Gold rose between 5.6 per cent and 10.2 per cent.
Mining stocks were also supported by a rise in gold prices as expectations of interest rate hikes from the U.S. Federal Reserve this year eased, following news of the interim U.S.-Iran deal.
Heavyweight financials rose 0.4 per cent, adding to gains.
Six of the 10 TSX sectors were in the green, with the energy sub-index being the biggest drag, down 0.8 per cent, after oil prices fell to a three-month low on the prospect of renewed supplies against weak physical demand.
“The price of oil is falling quite rapidly and if there is some sort of deal, I anticipate it going back to where it was before the conflict,” Small said.
Meanwhile, Canadian home sales rose 5.5 per cent in May, making up some ground after a slow start to the typically active spring market, and prices edged lower, data from the Canadian Real Estate Association showed.
Apparel maker Gildan Activewear (GIL-T -23.80%decrease) fell 5.1 per cent after Jehoshaphat Research said it is shorting the stock.
The blue-chip Dow touched an intraday record high on Tuesday as oil prices slid further on optimism around a U.S.-Iran peace deal, while SpaceX surpassed Amazon’s market value to become the fifth-most valuable U.S. firm.
Shares of SpaceX climbed almost 9.5 per cent, helping the company overtake Amazon’s market value.
The Elon Musk-led company said it would acquire software firm Anysphere for US$60 billion in a bid to ramp up its presence in the enterprise AI market.
Memory chip stocks rose, with Western Digital and Seagate Technology adding 9 per cent and 6 per cent, respectively.
Still, the S&P tech index was down 0.5 per cent after a sharp rally in the previous session.
Seven out of 11 major S&P 500 sector indexes moved higher as investors rotated into economically sensitive pockets of the market. Financial shares led gains with a 1.1 per cent rise.
Goldman Sachs gained 1.3 per cent, aiding the Dow, while JPMorgan and Bank of America added 1.8 per cent and 1.2 per cent, respectively.
The energy index lost 0.4 per cent as oil prices dropped to nearly a three-month low.
U.S. stocks rallied in the previous session after U.S. President Donald Trump said a preliminary agreement to end the conflict had been signed.
Still, doubts swirled around the deal as shippers said it could take weeks for confidence to return after any reopening of the Strait of Hormuz.
Markets will next turn to the Federal Reserve’s monetary policy decision on Wednesday.The central bank is widely expected to hold interest rates at the 3.50-3.75 per cent range, with investors closely watching Warsh’s comments on inflation, unemployment and the economic outlook.
“All eyes are on Warsh’s press conference, guidance and expectations for the market. But given the (U.S.-Iran) deal seems to be inked he has a little bit more latitude to be balanced,” said Thomas Hayes, chairman at Great Hill Capital.
“Historically, the market gets tested with a new Fed chair in the first year or so. There’s usually some market volatility.”
Inflation, in particular, is stuck more than a percentage point above the Fed’s 2 per cent target, and Warsh’s characterization of whether and when it is likely to fall will be a key first step in the evolution of monetary policy under his leadership.
Traders see a 42 per cent chance of a 25-basis-point rate hike in December, as per CME Group’s FedWatch tool, with rate cuts seen coming only after mid-2027.
The Dow Jones Industrial Average rose 360.77 points, or 0.70 per cent, to 52,031.80, the S&P 500 gained 7.49 points, or 0.10 per cent, to 7,561.78 and the Nasdaq Composite gained 35.07 points, or 0.13 per cent, to 26,719.01.
The benchmark S&P 500 was also near early June record highs after a slump driven by concerns about high valuations in the technology sector and the U.S.-Iran conflict.
Qualcomm rose 3.6 per cent after the Information reported that the chipmaker was in talks to acquire AI chip startup Tenstorrent for US$8 billion to US$10 billion.
Robinhood was up 1.1 per cent as the trading platform said it would cut 10 per cent of its full-time workforce and close remaining open roles.
Reuters
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