The Canadian market reached a new record high on Wednesday, surpassing the peak achieved about two weeks ago, as the Federal Reserve indicated potential rate cuts in the upcoming months.
The rise in crude oil and gold prices led to robust buying in the resource sectors, significantly driving the market’s upward trajectory.
The benchmark S&P/TSX Composite Index closed with a gain of 286.14 points, or 1.25%, at 23,110.81, marking an all-time high of 23,209.68 during the session.
The Energy Capped Index surged by 3.04%, while the Materials Capped Index rose by 2.01%, and the Information Technology Capped Index increased by 2.92%.
In the energy sector, Precision Drilling Corp (PD.TO) and Baytex Energy Corp (BTE.TO) saw significant gains of 6.8% and 5.3%, respectively. Similarly, Vermilion Energy (VET.TO), Arc Resources (ARX.TO), Veren Inc (VRN.TO), MEG Energy Corp (MEG.TO), Paramount Resources (POU.TO), Suncor Energy (SU.TO), Kelt Exploration (KEL.TO), Canadian Natural Resources (CNQ.TO), and Athabasca Oil Corp (ATH.TO) experienced increases ranging from 3.5% to 4.1%.
The Materials index observed a notable performance with New Gold Inc (NGD.TO) soaring over 13%. Hudbay Minerals (HBM.TO) and First Quantum Minerals (FM.TO) advanced by 6.1% and 5.6%, respectively. Additionally, Lundin Gold (LUG.TO), Capstone Mining (CS.TO), Torex Gold Resources (TXG.TO), and Ero Copper (ERO.TO) posted gains between 4% and 5%.
In the technology sector, CGI Inc (GIB.A.TO) climbed 4.6%, reporting third-quarter net earnings of $440.1 million, a 6.1% increase year-over-year.
Celestica Inc (CLS.TO) surged nearly 7%, while Docebo Inc (DCBO.TO) and Bitfarms (BITF.TO) gained 4.2% and 4%, respectively. Shopify Inc (SHOP.TO), Constellation Software (CSU.TO), Quarterhill (QTRH.TO), and Enghouse Systems (ENGH.TO) also saw increases of 2% to 3.1%.
On the economic front, Statistics Canada data indicated that Canada’s GDP remained flat at 0.1% in June.
Meanwhile, the Federal Reserve kept its interest rates unchanged but hinted at a potential rate cut in September. The Fed acknowledged "some further progress" towards its inflation target but emphasized the need for "greater confidence" that inflation is sustainably moving towards 2% before implementing rate cuts.
The Fed also stated it would continue to monitor incoming information affecting the economic outlook and reiterated its commitment to adjust monetary policy as necessary if risks arise that could hinder the achievement of its goals.
According to CME Group's FedWatch Tool, there is currently a 93.5% probability that the Fed will reduce rates by a quarter point in September.
