Canada’s primary stock index reached a milestone by surpassing the 30,000 mark for the first time, driven by a surge in the energy and base metals sectors, setting a new record. Meanwhile, U.S. stock markets displayed mixed performance during late-morning trading on Tuesday.
Notably, the S&P/TSX composite index initially exceeded 30,000 during early trading but later experienced a slight dip. Brian Madden, the chief investment officer at First Avenue Investment Counsel, attributed the index’s rise to a broad-based rally. Madden highlighted the significant impact of gold on the index’s performance this year and noted that strength in the energy and financial sectors contributed to the upward momentum.
Madden emphasized that while breaching the 30,000 threshold may have occurred sooner than expected, the market is currently driven by strong momentum. He reiterated the importance of maintaining focus on long-term investment goals despite passing psychological milestones and emphasized positivity towards the current market trends.
Brian Belski, the chief investment strategist at BMO Capital Markets, acknowledged the surprising stock market boom amidst concerns over tariffs and recession fears. He emphasized that the stock market is distinct from the economy and praised the resilience and focus on fundamentals displayed by Canadian companies, leading to the TSX achieving new highs.
Belski expressed optimism, expecting the TSX and other North American markets to sustain their upward trajectory. In New York, the Dow Jones industrial average rose by 66.27 points to 46,381.54, the S&P 500 index increased by 29.39 points to 6,693.75, and the Nasdaq composite surged by 157.50 points to 22,788.98.
Chipmaker Nvidia’s shares soared by 3.9% following the announcement of a $100 billion investment in OpenAI, the owner of the AI chatbot ChatGPT. This strategic partnership aims to enhance OpenAI’s computing power by incorporating at least 10 gigawatts of Nvidia AI data centers, making Nvidia the most valuable company on Wall Street.
Ian Chong, a portfolio manager at First Avenue Investment Counsel, highlighted the significant market impact of Nvidia’s investment and noted the positive effects on related stocks. Additionally, U.S. utilities experienced a boost as data center operations require substantial electricity consumption.
Furthermore, Oracle Corp.’s shares surged by 6.3% after news emerged that the tech giant would obtain TikTok’s algorithm to operate for U.S. users. Apple Inc. also saw a 4.3% increase in its shares, driven by strong demand for the newly released iPhone 17 and growth potential in the Chinese market.
The tech sector’s strength extended to Canada’s main index, with Shopify Inc.’s shares rising by 2.7%. The surge in gold prices also contributed to the TSX’s performance, with the December gold contract reaching $3,775.10 US an ounce on Monday.
Notably, Barrick Mining Corp. witnessed a 7.4% increase following the announcement of a project in Nevada capable of producing up to 750,000 ounces of gold annually. Kinross Gold Corp. also experienced a 3.8% rise in its shares, reflecting the overall positive trend in the gold mining sector.
Chong highlighted the catch-up trend observed in gold mining stocks, signaling a robust performance in the sector and a promising outlook for these companies moving forward.
