Canadian Stocks Jump As US Rate Cut Hopes Increase

(RTTNews) - Canadian stocks moved higher on Tuesday as US Fed rate cut expectations persist strongly based on today's US inflation data.

After opening higher than previous the close, the benchmark S&P/TSX Composite Index saw further upside to reach an intraday high of 27,954.02 by mid-afternoon. Then, inching down but staying positive, the index managed to settle at 27,921.26, up by 146.03 points (or 0.53%)

Data revealed by the US Labor Department revealed core consumer prices in the US rose by 0.3% from July, while the annual core consumer price inflation rate accelerated to 3.1% in July.

In July, the Consumer Price Index (CPI) in the US increased 0.2%, month-over-month, while the US annual inflation rate remained at 2.7%.

Traders feel that inflation has increased but not to the level it was feared and today's bland data has kept up expectations of an interest rate cut by the Federal Reserve next month.

On the trade front, US President Donald Trump signed an executive order granting an extension of the "tariff truce" between China and the US for 90 days, i.e., until November 10. Notably, this is the second extension given to China for arriving at a deal with the US.

In addition, Trump is meeting Russian President Vladimir Putin on Friday in Alaska to discuss means to end Russia's war with Ukraine.

These developments have created positivity in some investors who feel that the US may loosen its hard stance and strike a deal with Canada.

Today, China announced a 75.8% preliminary tariff on Canadian canola following an anti-dumping probe launched in 2024 in response to Canada's tax on Chinese electric vehicles (a high 100%). The Canola Council of Canada responded saying that the trade with China is aligned with international rules for trade.

As of now, burdened with a heavy 35% tariff for all its exports to the US, negotiations between high-level officials of both countries are underway with an aim to seek an end to this prolonging trade war.

Major sectors that gained in today's trading were Healthcare (1.96%), Real Estate (1.05%), Materials (0.94%), and Communication Services (0.88%).

Among the individual stocks, Bausch Health Companies (4.56%), Altus Group Ltd (9.51%), Exchange Income Corp (5.13%), Iamgold Corp (6.44%), and Capstone Mining Corp (4.97%) were the prominent gainers.

Major sectors that lost in today's trading were Industrials (0.32%), Consumer Staples (0.29%), IT (0.13%), and Utilities (0.10%).

Among the individual stocks, Thomson Reuters (2.64%), Alimentation Couche-Tard Inc (0.40%), Open Text Corp (2.52%), and Emera Incorporated (0.99%) were the notable losers.