Canada’s main stock index posted a second straight gain on Tuesday, with the S&P/TSX Composite rising 227.30 points, or 0.63%, to 36,171.49 as materials, gold miners and banks outweighed a slide in energy stocks. It sets up a crowded Wednesday: the Bank of Canada decides at 9:45 a.m. ET with markets pricing roughly a 75% to 85% chance of its first rate hike since July 2023, and the U.S. Federal Reserve follows at 2 p.m. ET.
Canada: TSX Builds on Monday’s Rebound
Materials jumped 3.2% and gold stocks gained 2.7%, while technology edged up 0.8%. Celestica rose nearly 12% after beating third-quarter revenue and profit estimates. The big banks climbed as Canadian bond yields eased: BMO gained 1.2%, CIBC 1.1% and Scotiabank 0.8%.
Energy was the drag, falling 2.3% as crude slid. Cenovus Energy dropped 4.4% and Imperial Oil 4.2%. Consumer staples (-1.1%) and telecoms (-1.0%) also lagged.
Trade headlines helped sentiment. Reuters reported that the U.S. and Canada are working on a deal to ease U.S. tariffs on Canadian steel and autos, citing two U.S. and four Canadian sources. No agreement has been announced.
| Canadian markets | Close | Change |
|---|
| S&P/TSX Composite | 36,171.49 | ▲ +227.30 (+0.63%) |
| TSX Venture | 838.48 | ▲ +13.20 (+1.60%) |
| Canadian dollar (US cents) | 71.17¢ | ▼ -0.2¢ (1.4050 per US$) |
| Canada 2-year yield | 3.367% | ▼ about -1 bp |
The loonie slipped 0.2 of a cent to 71.17 U.S. cents (about C$1.4050 per U.S. dollar) as oil fell and traders trimmed positions ahead of the decision. It remains close to last Friday’s five-week high near C$1.3966.
Why a Bank of Canada hike is on the table
The Bank has held at 2.25% for seven straight decisions. Markets expect a 25-basis-point increase to 2.50%, driven by energy-led inflation: Governor Tiff Macklem signalled earlier this month that the Bank expects to raise its inflation forecast significantly. September CPI came in at 3.1%.
Economists are not unanimous. Canada lost about 68,000 jobs in September, and some analysts, including TD, point to limited breadth in underlying inflation. The accompanying Monetary Policy Report and forward guidance may move the loonie more than the rate decision itself.
U.S.: Chips Lead as the Fed Meeting Begins
Wall Street rose for a second straight session. The Nasdaq jumped 1.18% and the S&P 500 gained 0.60%, while the Dow was little changed. Small caps did well too: the Russell 2000 added 1.2%.
Semiconductor stocks led. Broadcom rose about 4% after a bank group and Blackstone announced US$63 billion in financing tied to Anthropic’s use of its technology, and chip stocks have also been lifted by news of Anthropic’s IPO filing. Micron and AMD rose in sympathy. JetBlue surged roughly 18% on its outlook for margin expansion, and UPS gained after raising its annual forecasts. Boeing fell 10.7% after a larger-than-expected quarterly loss, and Meta slipped about 1.6%.
| U.S. markets | Close | Change |
|---|
| Dow Jones Industrial Average | 52,377.57 | ▲ +15.99 (+0.03%) |
| S&P 500 | 7,722.60 | ▲ +45.83 (+0.60%) |
| Nasdaq Composite | 26,477.81 | ▲ +308.43 (+1.18%) |
| U.S. 10-year Treasury yield | about 4.99% | little changed |
Economic data was firm. The Conference Board’s consumer confidence index rose to 91.7 from 84.2, and September durable goods orders increased 1.8%. With U.S. consumer prices running at 3.7% annually in September, traders see about a 90% chance the Fed holds at 3.75% to 4.00% on Wednesday, but roughly a 73% chance of another increase by year-end. Fed Chair Kevin Warsh holds a news conference at 2:30 p.m. ET. Alphabet and Microsoft report after the close.
Europe: Tech Rallies, HSBC Weighs on London
European shares closed mostly higher as lower oil prices and strong tech earnings offset weakness in banks. The FTSE 100 fell 0.75% as HSBC dropped about 5.4% after third-quarter results missed expectations, and Reckitt slid after cutting its sales guidance. Chip-related names such as BE Semiconductor and AT&S led the STOXX 600 higher, up 0.47%. Early Wednesday, European markets were slightly lower ahead of Thursday’s European Central Bank decision, where a hold is widely expected.
| European markets | Close | Change |
|---|
| STOXX Europe 600 | 643.68 | ▲ +0.47% |
| Germany DAX | 25,590.77 | ▲ +0.71% |
| France CAC 40 | 7,887.14 | ▲ +0.51% |
| UK FTSE 100 | 10,686.54 | ▼ -0.75% |
Asia: Chip Optimism Powers Seoul and Tokyo
Asian markets were mixed Tuesday, with AI-chip enthusiasm lifting Japan and South Korea while Hong Kong and mainland China slipped. On Wednesday, South Korea’s KOSPI surged 6.8% to 6,023.73 after SK Hynix reported a more than sevenfold jump in third-quarter operating profit, and Samsung Electronics also rallied ahead of its own results on Thursday. Japan’s Nikkei added 1.1%, Hong Kong recovered 0.2% and Shanghai gained 0.5%.
| Asia-Pacific | Tue. Oct. 27 close | Wed. Oct. 28 close |
|---|
| Japan Nikkei 225 | 63,268.37 ▲ +1.73% | 63,954.19 ▲ +1.1% |
| South Korea KOSPI | 5,638.34 ▲ +3.1% | 6,023.73 ▲ +6.8% |
| Hong Kong Hang Seng | 23,041.32 ▼ -0.73% | 23,089.22 ▲ +0.2% |
| Shanghai Composite | 3,648.30 ▼ -1.33% | 3,666.50 ▲ +0.5% |
| Australia S&P/ASX 200 | about 8,850 ▲ +0.5% | — |
Oil, Gold and the Dollar
WTI crude settled at US$99.90, down 1.8%, as Saudi, Turkish and Pakistani officials held talks in Tehran aimed at easing the Middle East conflict, though renewed Houthi attacks on Saudi Arabia and Strait of Hormuz risks keep a large premium in prices. Brent hovered near US$114 after touching about US$117 on Monday. Gold recovered to roughly US$4,058 an ounce, helped by easing oil-driven inflation worries, even as a firmer U.S. dollar capped the gains.
| Commodities & currency | Level | Move |
|---|
| WTI crude oil | US$99.90 | ▼ -1.8% |
| Brent crude oil | about US$114 | off Monday’s ~US$117 peak |
| Gold (spot) | about US$4,058 | ▲ +1.05% |
| Silver (spot) | about US$54.20 | ▲ +0.66% |
| U.S. dollar index | about 102.2 | firmer |
What it means for you
- Variable-rate mortgages and HELOCs: a 25-basis-point hike adds about $21 a month in interest per $100,000 borrowed, or roughly $83 a month on $400,000. Lenders usually raise prime within a day of the announcement.
- Fixed-rate mortgages: these follow bond yields more than the overnight rate, so watch what the Bank signals about future hikes, not just today’s move.
- Savers: high-interest savings and GIC rates could edge higher after a hike. Compare offers before locking in.
- U.S. travel and shopping: at 71.17 cents, US$100 costs about C$140.50.
- At the pump: oil near US$100 keeps fuel and heating costs elevated heading into winter.
What to Watch Next
- Wednesday, 9:45 a.m. ET: Bank of Canada rate decision and Monetary Policy Report. Markets expect 2.25% to rise to 2.50%.
- Wednesday, 2 p.m. ET: U.S. Federal Reserve decision, followed by Chair Warsh’s 2:30 p.m. news conference. Alphabet and Microsoft earnings after the close.
- Thursday: U.S. third-quarter GDP (advance estimate), September PCE inflation and jobless claims at 8:30 a.m. ET, plus the European Central Bank decision and Samsung earnings.
- Friday: Canada’s August GDP.
Figures reflect Tuesday, Oct. 27, 2026 closes unless noted; Asia-Pacific “Wed.” figures are Oct. 28 closes. Spot and settlement prices for commodities are as reported late Tuesday. Sources: Reuters, AP, Baystreet.ca, Kitco, CNBC, Yahoo Finance, TradingView, MarketScreener. This article is for general information only and is not financial advice.
Comments
Post a Comment