The S&P/TSX Composite Index climbed 1.5% to close at 36,633 as expectations for a US Federal Reserve rate hike in September eased. Fed Governor Christopher Waller signaled a more patient approach to monetary policy, indicating he would wait to see whether inflationary pressures continue to moderate. Following his remarks, markets scaled back the probability of a near-term Fed hike, and both Canadian and US government bond yields pulled back from their 2025 highs.
Financials advanced, with Royal Bank of Canada gaining 1.6%, and both Bank of Montreal and CIBC rising 1.8%. Strength in gold prices supported the materials sector: Agnico Eagle climbed 5%, Barrick Gold added 3.1%, and Wheaton Precious Metals (WPM) rose 3.7%.
Technology stocks also delivered strong gains, buoyed by a rally in US hyperscalers. Shopify was up 2.3%, while Celestica surged 11.3%, as ongoing hyperscaler capital expenditures continued to drive rapid growth in high-performance AI computing and enterprise hardware.
In Canada, despite the Bank of Canada leaving its policy rate unchanged on Wednesday, Governor Tiff Macklem reiterated that policymakers remain prepared to raise rates again if inflation stays elevated.
