Despite a positive outlook for Bay Street on Wednesday, driven by firm European stocks and rising commodity prices, key U.S. consumer price inflation data and the Federal Reserve's monetary policy announcement will ultimately guide the market sentiment.
The Labor Department is scheduled to release the inflation data at 8:30 AM ET, with the Federal Reserve's policy announcement following at 2 PM ET. Economists predict that U.S. consumer prices will see a modest increase of 0.1% in May, following a 0.3% rise in April. Core consumer prices, excluding food and energy, are expected to climb by 0.3% for the second consecutive month. The annual consumer price growth rate is anticipated to remain steady at 3.4%, while core consumer price growth is expected to taper off slightly to 3.5% in May from 3.6% in April.
Although the Federal Reserve is broadly expected to maintain interest rates, traders will closely scrutinize the accompanying statement and the latest economic and interest rate projections.
In Canadian earnings news, Dollarama Inc (DOL.TO) reported a significant increase in net earnings, reaching $215.8 million or $0.77 per diluted common share for the first quarter of 2025. This marks a 20% rise compared to $179.9 million, or $0.63 per diluted common share, in the first quarter of fiscal 2024.
On Tuesday, the Canadian market closed at a near six-week low, impacted by losses in materials and financial sectors. The S&P/TSX Composite Index fell by 182.42 points or 0.83%, ending at 21,887.34, approximately 45 points above its lowest point of the day at 21,842.90.
In Asia, stocks slipped on Wednesday as investors awaited crucial U.S. inflation data and the Federal Reserve's policy decision for more insight into interest rate trends. Early market activity was influenced by China's producer and consumer price data, revealing steady consumer inflation and easing factory gate inflation for May. Additionally, reports of potential further U.S. restrictions on China’s access to artificial intelligence chip technology added to market considerations.
European shares traded positively but cautiously on Wednesday, with investors awaiting U.S. inflation data and the Federal Reserve's monetary policy decision for further guidance on interest rates.
In the commodities market, West Texas Intermediate Crude oil futures increased by $0.90 or 1.15%, reaching $78.80 per barrel. Gold futures saw a rise of $3.40 or 0.15%, settling at $2,330.00 an ounce, while silver futures went up by $0.294 or 1.01%, hitting $29.525 an ounce.
