Canada’s main stock index remained flat on Monday despite weakness in resource stocks as broader market gains took hold with global markets buoyed by easing Middle East tensions.
At 10:38 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 5.45 points, or 0.02%, at 21,812.28.
The material sector, which houses Canadian miners and fertilizer companies, dropped 2.2% and was set for its worst day in over two months.
It was pulled down by miners such as K92 Mining and NOVAGOLD Resources that fell 5.1% and 4.7%, the highest amongst the sectors, tracking sharp declines in precious metal prices.
Energy shares followed suit with a 0.3% slide on declining oil prices.
Declines were limited by technology stocks that rose 0.7% pulled up by a 5.2% and 2.7% gain in crypto miners Hut 8 and Bitfarms, respectively, as Bitcoin rose 3.3%.
The TSX outperformed its Wall Street peers on Friday, ending 0.5% higher, while paring some of its weekly declines to end the week 0.4% lower.
Wall Street, however, opened higher on Monday after steep losses in the previous session.
During the week, the monthly reading of the personal consumption expenditure (PCE) in the U.S., which is the Federal Reserve’s preferred measure of inflation, is on the radar.
“We’ve been getting higher and hotter inflation data out of the US that has caused some anxiety for the markets. (This number) is going to be key,” said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth.
Investors will also focus on the big tech earnings in the United States, with giants like Microsoft, Alphabet and Meta reporting their quarterly earnings this week.
In Canadian corporate news, shares of uranium miner Energy Fuels fell 8.7% after it announced a deal to buy Australia’s Base Resources for about $241-million.
Wall Street’s main indexes rose on Monday after steep losses in the previous session as easing Middle East tensions buoyed risk appetite, while investors looked ahead to an action-packed week with major tech earnings and a key inflation print.
The Nasdaq and the S&P 500 ended lower on Friday as Netflix shares weighed after a dour quarterly earnings report, with both the indexes suffering six straight sessions of declines last week, their longest since October 2022.
Some megacap growth stocks edged higher in early trading, with Meta Platforms, Amazon and Apple up between 0.6% and 1.5%.
Nvidia advanced 2.8%, rebounding from a 10% drop in the last session.
“The market got over-sold on Friday because of Netflix earnings, it was primarily a tech-driven decline,” said Jay Hatfield, CEO and portfolio manager at InfraCap.
“We’re headed into megacap earnings and so people are starting to realize that Netflix is not very indicative of what’s going to happen with other megacap stocks.”
Tesla, Meta Platforms, Alphabet and Microsoft will be in focus this week as the companies gear up to deliver their quarterly numbers, whose performance could further test the rally in U.S. stocks.
The risk-on mode was also supported by signs of easing tensions in the Middle East, as Iran’s foreign minister said on Friday Tehran was investigating an overnight attack, adding that so far a link to Israel had not been proven as he downplayed the strike.
Equities have sold-off recently as market participants readjust their interest rate cut expectations from the U.S. Federal Reserve after a string of strong economic data signaling persistent inflationary pressures.
Money markets are now pricing in just about 38 basis points (bps) of rate cuts this year, down from about 150 bps seen at the beginning of the year, according to LSEG data.
On the docket this week would be the price consumption expenditure (PCE) index reading for March – the Fed’s preferred inflation gauge – to further ascertain the monetary policy trajectory.
Fed policymakers were in a media blackout ahead of their latest policy meeting on May 1.
The Dow Jones Industrial Average was up 44.85 points, or 0.12%, at 38,031.25, the S&P 500 was up 18.13 points, or 0.36%, at 4,985.36, and the Nasdaq Composite was up 109.81 points, or 0.72%, at 15,391.82.
Six of the 11 major S&P 500 sectors were trading higher, with communication services leading gains, up 0.9%.
Among single stocks, Tesla fell 3.7% as the electric vehicle maker cut prices in a number of its major markets, including China and Germany, following price reductions in the United States.
Salesforce rose 2.3% after the business software maker backed away from its talks to acquire data-management software firm Informatica after the two companies could not agree on terms.
Advancing issues outnumbered decliners by a 1.23-to-1 ratio on the NYSE and by a 1.17-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and two new lows, while the Nasdaq recorded 13 new highs and 55 new lows.
– Reuters
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.