S&P/TSX Composite Index Rises as U.S. Markets Experience Tech-Led Rally

On Friday, Canada's primary stock market index, the S&P/TSX composite index, experienced a notable increase. Strength in technology and telecom sectors played a significant role in this upward shift, paralleling a broader rally in U.S. markets, particularly marked by a surge in tech stocks. The S&P/TSX composite index closed the day with a gain of 175.51 points, reaching a total of 25,073.54 points.

In the U.S., the situation was similar, with the Dow Jones industrial average climbing by 339.86 points and settling at 42,732.13. The S&P 500 index also saw a rise, increasing by 73.92 points to 5,942.47. However, it was the Nasdaq composite that showcased the most significant growth, jumping 340.89 points and reaching 19,621.68, reflecting a 1.8 percent gain overall.

Notably, this Friday marked a change from the previous week's trends, as Mike Archibald, a vice-president and portfolio manager at AGF Investments Inc., pointed out. Many trading days prior, markets often started strong yet faced sell-offs by the end of the day. Archibald remarked, "Today’s action should inspire a little bit of confidence into next week."

A potential catalyst contributing to this market positivity was the reelection of Mike Johnson as House speaker. Archibald suggested that Johnson's election might have alleviated some uncertainties regarding the upcoming inauguration of Donald Trump, with Johnson being a strong supporter of Trump. This development was likely a factor lifting market sentiment as the afternoon progressed.

Investor optimism towards growth-oriented sectors was apparent, especially within the tech market. Major technology companies reported substantial gains: Nvidia shares increased by 4.5 percent, while Tesla, recovering from previous losses, saw an 8.2 percent rise. Notable gains were also seen with Super Micro Computer, which surged by 10.9 percent, and Palantir Technologies, which rose by 6.3 percent.

The ongoing enthusiasm surrounding the growth of artificial intelligence technology has driven these significant gains in tech stocks throughout 2024. As the inauguration date approaches, Archibald expects an uptick in sectors that are likely to benefit from Trump's presidency, particularly in cryptocurrencies and financials, stating, "I expect that those sectors are going to start to resume leadership as we get closer to January 20."

In commodities, there was a noticeable uptick attributed to news of increased economic stimulus in China, which boosted market outlook. Meanwhile, the Canadian dollar, referred to as the loonie, hovered near 69 cents U.S., trading at 69.24 cents, a slight drop from 69.36 cents from the previous day. In terms of commodities pricing, the February crude oil contract rose by 83 cents, hitting $73.96 per barrel, while natural gas prices dipped by 31 cents to $3.35 per mmBTU. February gold contracts saw a decline of $14.30, settling at $2,654.70 an ounce, but March copper contracts managed a slight increase of four cents, reaching $4.07 per pound.

— With contributions from The Associated Press.

Stocks, Market, Technology