(Toronto) Canada’s main stock index rose nearly 200 points on Friday, boosted by strength in the energy, technology and base metals sectors, while U.S. stock markets also advanced.
The latest U.S. jobs report surprised to the upside, bringing relief to market watchers, said Graham Priest, portfolio manager at BlueShore Financial.
The report showed that the U.S. economy added 254,000 jobs last month, more than in August and much better than economists expected.
He also indicated that a soft landing for the economy is still possible after the US Federal Reserve raised rates to cool inflation, Priest said.
“Overall, with the surprising employment numbers and unemployment falling, it had a big impact,” he said.
Wall Street was on edge after two weaker-than-expected jobs reports reinforced concerns that the Fed had waited too long to start cutting its key interest rate. Some investors were even betting that the Fed could announce another sizable half-percentage-point cut this year, after starting the easing cycle with a cut last month.
But now that some concerns about the employment situation have been eased, the Fed appears ready to gradually cut the rate this year and in 2025, Priest said.
The S&P/TSX Composite Index closed up 194.33 points at 24,162.83.
In New York, the Dow Jones industrial average rose 341.16 points to 42,352.75. The S&P 500 index rose 51.13 points to 5,751.07, while the NASDAQ Composite Index jumped 219.38 points to 18,137.85.
The Canadian dollar traded at 73.65 US cents compared to 73.86 US cents on Thursday.
On the New York Mercantile Exchange, the price of crude oil rose 67 cents to US$74.38 per barrel and that of natural gas fell 12 cents to US$2.85 per million BTU.
The gold contract fell US$11.40 to US$2,667.80 per ounce and the copper contract gained two cents to US$4.57 per pound.
Oil prices rose significantly this week as tensions escalated in the Middle East, with Iran sending missiles toward Israel and Israel increasing its incursion into Lebanon.
Prices will likely continue to face upward pressure in the coming weeks as the conflict continues, Priest said, also highlighting concerns about what Israeli retaliation could mean for Iranian crude exports. and global supply.
Although markets have been trending well recently, uncertainty in the Middle East has caused investors to pause, Priest said.
One concern is that if the situation continues to worsen and oil supplies are disrupted, higher prices could end up being inflationary, he added.
With information from the Associated Press