TORONTO — Canada's main stock index pared some of its earlier gains at the close of the trading day, while U.S. stock markets were mixed after the Federal Reserve decided to hold steady on rates.
The S&P/TSX composite index was up 74.21 points at 21,961.55.
In New York, the Dow Jones industrial average was down 35.21 points at 38,712.21. The S&P 500 index was up 45.71 points at 5,421.03, while the Nasdaq composite was up 264.89 points at 17,608.44.
The latest U.S. inflation data released Wednesday showed consumer prices rose 3.3 per cent year-over-year in May, down from 3.4 per cent in April.
That marked “modest further progress” toward the U.S. Federal Reserve’s two per cent inflation target, officials said, sparking some hope it could be getting closer to cutting its benchmark interest rate from its 23-year peak.
But the central bank said it wasn’t ready to do so just yet.
The Fed held its key rate steady on Wednesday as policymakers said they are now forecasting one rate cut this year, down from a previous projection of three cuts.
The Fed said the economy is growing at a solid pace while hiring has “remained strong.”
In holding its interest rate, the U.S. central bank diverged from many of its global counterparts, including the Bank of Canada, which have moved to begin lowering their key policy rates, said Jennifer Tozser, senior wealth adviser and portfolio manager with Tozser Wealth Management at National Bank Financial Wealth Management.
Last week, the Bank of Canada announced its first interest rate cut after a steep hiking cycle. The quarter-percentage-point cut was its first in more than four years, meaning its key interest rate now stands at 4.75 per cent.
“The fact (the Fed) didn’t lower rates shows a sign of strength in the U.S. markets,” said Tozser.
“It should be reflected in the fact the U.S. dollar outperforms the Canadian dollar.”
The Canadian dollar traded for 72.99 cents US compared with 72.64 cents US on Tuesday.
The July crude oil contract was up six cents at US$78.50 per barrel and the July natural gas contract was down eight cents at US$3.05 per mmBTU.
The August gold contract was up US$28.20 at US$2,354.80 an ounce and the July copper contract was up five cents at US$4.56 a pound.
—With files from The Associated Press
This report by The Canadian Press was first published June 12, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Sammy Hudes, The Canadian Press
