Canadian Stocks Advance As Expectations Build For BoC Rate Cut

(RTTNews) - Canadian stocks gained modestly on Thursday as investor sentiment mirrored the US markets, where inflation numbers which matched expectations bolstered hopes for rate cuts by the central bank.

After opening just higher than yesterday's close, the benchmark S&P/TSX Composite Index traded firmly positive throughout the session. Hitting an intraday high of 29,418.78, the finally settled at 29,407.89, up by 228.50 points (or 0.78%). Today's closing value is a new record high for the index.

Eight of the 11 sectors posted gains today with the industrials sector leading the pack.

Left to face a near economic rupture after US President Donald Trump hit Canada with 35% tariffs on all its exports (not falling under CUSMA) to the US, Prime Minister Mark Carney is focused on launching and speeding up mega infrastructure projects to support domestic economy.

The PM has also planned for measures in the upcoming budget aimed at reducing wasteful spending.

On the tariff front, the Trump administration is battling the validity of reciprocal tariffs in the US Supreme Court after a lower court deemed them as "illegal" on August 29.

The news dampened the medium-term economic outlook since now that trade negotiations between US and Canada have hit a deadlock seemingly for a very long period.

In its spring session of Parliament, Carney brought in the Bill C-5, which intended to streamline and speed up approvals for projects that the PM and his cabinet decide falls under national interest. Carney's government even launched a new office in summer to hasten project approvals.

On the economic front, no significant Canadian data were scheduled for today's release.

However, in the US, the CPI data from today and PPI numbers from yesterday have reinforced expectations of a US Fed rate cut at the upcoming September 16-17 Fed's meeting. Traders are pricing in a similar rate cut by Bank of Canada.

In March, the Canadian central bank dropped the overnight interest rate to 2.75% and held that rate during their August announcement.

A combination of weaker jobs data, both north and south of the border, has provided the bank a compelling reason to deliver a 25-point cut in their upcoming meeting, according to experts.

As investors brace for a potential lowering of rates, the Canadian Dollar was weighed down by bearish sentiment.

The government's five-year bond yield is in the 2.7% range for the first time after May 2025. The 10-year yield rose to 3.225% on Tuesday before falling to 3.174% on Wednesday

Major sectors that gained in today's trading were Industrials 1.63(%), Consumer Discretionary (1.35%), Real Estate (1.10%), and Materials (0.99%).

Among the individual stocks, Bird Construction Inc (6.88%), Restaurant Brands International Inc (2.26%), Dream Industrial REIT (1.71%), Fortuna Mines Inc (6.31%) and Novagold Res Inc (5.34%) were the prominent gainers.

Major sectors that lost in today's trading were IT (0.10%), Utilities (0.08%), Healthcare (0.28%), and Energy (0.39%).

Among the individual stocks, Sylogist Ltd (4.60%), Celestica Inc Sv (3.02%), Boralex Inc (1.58%), and Vermillion Energy Inc (3.30%) were the notable losers.

First Majestic Silver Corp (10.03%), Aecon Group Inc (9.55%), and Atkinsrealis Group Inc (7.99%) were among the prime market-moving stocks today.