Canada’s main stock index set a record high at the start of the week, driven largely by the technology sector. The Toronto S&P/TSX composite index rose by 0.6 percent, reaching 30,656.55 points at 9:30 a.m. ET on Monday. This increase built upon last week’s gains, fueled by positive sentiment from Wall Street.
Factors Behind the Surge
Despite disappointing domestic services PMI data, technology stocks thrived due to ongoing enthusiasm for artificial intelligence (AI). This sector’s growth has significantly bolstered market performance over the past week. Investors are optimistic as they await Canadian employment data, which could impact the Bank of Canada’s monetary policy decisions.
Wall Street Influence
Wall Street’s main indexes also opened higher, continuing their upward trend. The following were notable movements:
- The Dow Jones Industrial Average increased by 17.8 points, or 0.04 percent, to 46,776.04.
- The S&P 500 rose by 18.1 points, or 0.27 percent, to 6,733.86.
- The Nasdaq Composite climbed 113.8 points, or 0.50 percent, to 22,894.352.
A surge in AMD’s stock, following its partnership with OpenAI, was a key driver for this rally. Shares of AMD rose by 34.1 percent in early trading, reflecting strong investor enthusiasm in the tech sector despite ongoing concerns about a federal government shutdown.
Economic Implications
The ongoing government shutdown has raised concerns about the release of crucial economic data. Alternative indicators suggest slow hiring rates, leading to expectations that the Federal Reserve may reduce interest rates by 25 basis points at its next meeting.
Goldman Sachs indicated that the military pay date on October 15 could pressure lawmakers to resolve the budget deadlock. If the shutdown continues beyond that date, 1.3 million military personnel may go unpaid.
Analysts believe that the upcoming third-quarter earnings season will be critical for sustaining the index’s rally. By the end of October, 68 percent of companies representing 72 percent of market capitalization are expected to report their earnings.
Global Context
International markets showed varied reactions. Japan’s Nikkei index jumped nearly 5 percent, reaching record highs. In contrast, France’s market fell by nearly 2 percent following the resignation of Prime Minister Sebastien Lecornu.
- The DAX in Germany gained 0.3 percent.
- Britain’s FTSE 100 increased by 0.2 percent.
In Asia, the Nikkei 225 rose 4.8 percent, with a strong showing from defense-related shares following the political developments in Japan.
Commodity Markets
In energy trading, U.S. crude oil prices rose by 51 cents to $61.39 per barrel, and Brent crude increased by 59 cents to $65.12 per barrel. The OPEC+ alliance recently announced a minor increase in oil production, citing a stable global economic outlook, which eased oversupply fears.
Overall, investor sentiment remains focused on technological advancements, economic indicators, and earnings reports as pivotal elements of market performance moving forward.
