Canadian stocks showed positive momentum around noon on Wednesday, driven by renewed optimism regarding the Federal Reserve's interest rate outlook. This sentiment followed data revealing that U.S. consumer price inflation remained unchanged in May, contrary to the anticipated 0.1% increase.
Significant gains were observed in real estate, healthcare, technology, materials, financials, consumer staples, and industrials sectors.
The S&P/TSX Composite Index climbed 160.48 points, or 0.73%, reaching 22,047.82 just before midday.
A notable surge was seen in Canadian Western Bank (CWB.TO) shares, which skyrocketed by 71% following an all-share acquisition deal with National Bank of Canada (NA.TO) valuing CWB at approximately $5 billion. However, shares of National Bank of Canada dropped by over 5%.
Other gainers included EQB Inc (EQB.TO), Colliers International (CIGI.TO), Bombardier Inc (BBD.B.TO), and Alimentation Couche-Tard (ATD.TO), which rose between 3.2% and 5%.
Several companies also experienced modest gains ranging from 1% to 3%, including FirstService Corporation (FSV.TO), Cargojet (CJT.TO), BRP Inc (DOO.TO), Boyd Group Services (BYD.TO), Franco-Nevada Corporation (FNV.TO), and WSP Global (WSP.TO).
The Labor Department reported that the consumer price index remained unchanged in May, following a 0.3% rise in April, against economists' forecast of a 0.1% rise. This stability was attributed to a 3.5% drop in gasoline prices, which balanced out the continuous climb in shelter costs.
Excluding food and energy, core consumer prices increased by 0.2% in May, following a 0.3% rise in April, aligning with economists' 0.3% projection.
Additionally, the annual consumer price growth rate decelerated to 3.3% in May from 3.4% in April, against the unchanged expectation. Meanwhile, the annual core consumer price growth rate eased to 3.4% in May from 3.6% in April, versus the anticipated drop to 3.5%.
These slower-than-expected growth rates are likely to bolster optimism regarding the interest rate outlook ahead of this afternoon's Federal Reserve monetary policy announcement.
