Equities in Canada jumped over 1% to achieve a record high on Friday, led by technology and energy shares, after U.S. Federal Reserve Chair Jerome Powell signaled willingness towards future rate cuts at the Jackson Hole Symposium.
The TSX Composite Index bounced 366.41 points, or 1.2%, to pause for lunch Friday at 28,391.84.
The Canadian dollar surged 0.35 cents to 72.28 cents U.S.
On the week so far, TSX has risen 1.5%.
On the day, Cenovus Energy jumped 3.7% after the oil and gas producer agreed to buy MEG Energy in a cash-and-stock deal valued at $7.9 billion including debt.
ON BAYSTREET
The TSX Venture Exchange popped 15.38 points, or 2%, to 801.71.
All but two of the 12 TSX subgroups were gainers midday, with information technology screaming higher 2.6%, while shares in material and real-estate stocks each flew 1.4%.
The only laggards were telecoms, down 0.3%, and consumer staples, off 0.1%.
ON WALLSTREET
The Dow Jones Industrial Average rallied to an all-time high Friday after Federal Reserve Chair Jerome Powell signaled the central bank could begin easing monetary policy next month.
The 30-stock index popped 904.75 points, or 2%, to move into Friday afternoon at 45,690.25.
The S&P 500 revived 103.81 points, or 1.6%, to 6,473.98.
The NASDAQ surged 413.19 points, or 2%, to 21,513.62
Shares of megacap technology stocks soared on Powell’s comments. Nvidia added 1.3%, while Meta, Alphabet and Amazon each climbed more than 2%. Tesla shares jumped about 5%.
In a tepid speech at the central bank’s annual conclave in Jackson Hole, Wyoming, Powell said that “the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”
Powell added that “the balance of risks appear to be shifting” between the Fed’s dual mandate of full employment and stable prices. He cited “sweeping changes” in tax, trade and immigration policies.
Expectations for a 0.25 percentage-point rate cut in September skyrocketed to roughly 91% following the speed from about 75% earlier in the week,
Recently, the prospect of lower interest rates helped bolster parts of the market that have missed out on this year’s rally, with investors dumping megacap tech for small caps and value plays. However, a more hawkish outlook from Powell could throw cold water on the market.
Prices for 10-year Treasury gained ground Friday, reducing yields to 4.25% from Thursday’s 4.33%. Treasury prices and yields move in opposite directions.
Oil prices dipped eight cents to $67.59 U.S. a barrel.
Gold prices rocketed $39.60 at $3,421.20 U.S. an ounce.
