Canadian Stocks Move Higher Amid BoC Rate Cut Expectations

(RTTNews) - Canadian stocks gained modestly on Wednesday as BoC rate cut expectations by investors mirrored the US, where anticipation for a rate cut has transformed to a near-certainty amid encouraging inflation data.

After opening higher than yesterday's close, the benchmark S&P/TSX Composite Index moved up to reach an intraday high of 29,218.25 within an hour. The index subsequently gave back ground but managed to remain in positive territory but ending the day at a new record closing high of 29,179.39, up by 116.38 points (or 0.40%).

Four of the 11 sectors posted gains today, with the energy sector leading the pack amid a sharp increase by the price of crude oil.

Days before, Canadian Prime Minister Mark Carney announced $80-million tariff-relief funding for small and medium-sized businesses in Atlantic Canada as part of a larger $1-billion fund to help businesses hit by American tariffs that came into effect August 1.

In an effort to strengthen the domestic economy, the government has already framed Bill C-5 legislation intended to speed up approval of major projects.

Today, speaking in Edmonton, Carney stated that he will be announcing the first series of major industrial projects under Bill C-5 tomorrow. In addition, Carney's government is seeking out marketplaces outside the US.

Interestingly, the National Payroll Institute's 2025 Annual Survey of Working Canadians revealed that the financial health of working Canadians (contrary to perception) may finally be improving after years of decline and that they are saving more money.

In the US, inflation data for August revealed that that the producer prices fell 0.1% month-on-month and growth slowed to 2.6% year-on-year.

Month-on-month core producer prices (excluding food and energy) fell by 0.1%, while year-on-year growth slowed to 2.8% in August.

Investors are now pricing in the chances of a 25-basis-point cut at the Fed's September 16-17 meeting at 92.1% and even a 7.9% chance of a larger 50-basis point cut, according to the CME Group's FedWatch Tool.

Since last Friday when Canadian jobs data showed poor numbers, expectations of a rate cut by the Bank of Canada in September are also trending higher.

On the trade front, talks between Canada and the US are in limbo after an appeals court declared reciprocal tariffs illegal. The Trump administration has appealed the verdict in the US Supreme Court, seeking a reversal of the judgment.

As a final verdict is expected to come only months later, the bilateral trade scene has grown murkier.

Major sectors that gained in today's trading were Energy (1.92%), Materials (1.57%), Financials (0.38%), and Utilities (0.19%).

Among the individual stocks, Baytex Energy Corp (6.47%), Tamarack Valley Energy Ltd (5.48%), Cenovus Energy Inc (4.92%), Iamgold Corp (9.09%), and Equinox Gold Corp (8.20%) were the prominent gainers.

Major sectors that lost in today's trading were Real Estate (0.39%), IT (0.57%), Communication Services (0.59%), and Healthcare (0.64%).

Among the individual stocks, Altus Group Ltd (1.79%), Sienna Senior Living Inc (1.42%), Telus Corp (1.45%), Lightspeed Commerce Inc (3.69%) and Constellation Software Inc (3.50%) were the notable losers.