The S&P/TSX composite index closed higher on Tuesday, lifted in part by a jump in the price of oil. The index was up 84.68 points at 25,616.86. In New York, the Dow Jones industrial average was down 269.67 points at 42,140.43, a day after it saw a more than 1,100-point gain.
The S&P 500 index was up 42.36 points at 5,886.55, while the Nasdaq composite was up 301.74 points at 19,010.08. Stocks rallied across the board on Monday after a weekend China-U.S. trade meeting resulted in a 90-day pause on tariffs between the two economic heavyweights. On Tuesday, U.S. investors focused on a better-than-expected inflation report showing a slowing to 2.3 per cent last month from 2.4 per cent in March.
Macan Nia, co-chief investment strategist at Manulife Investment Management, said investors saw the inflation data as a good news story.
Oil prices lift TSX higher
“It solidifies the likelihood that the Fed begins cutting interest rates earlier rather than later and they may cut two or more times this year, so that’s what has got investors across the world excited today,” Nia said.
Later this week, Nia noted he would be looking at retail sales and Producer Price Index data from the U.S. to gauge consumer resilience. He also said Bay Street was “piggybacking” on the improved U.S. market sentiment. A boost in the price of oil also propelled the Canadian market, which is heavily weighted toward energy.
The energy subindex on the TSX posted an almost two per cent gain on Tuesday. The June crude oil contract was up US$1.72 at US$63.67 per barrel, and the June natural gas contract was flat at US$3.65 per mmBTU. The June gold contract was up US$19.80 at US$3,247.80 an ounce and the July copper contract was up 10 cents US to US$4.72 a pound.
The Canadian dollar traded for 71.59 cents US compared with 71.44 cents US on Monday.
