Canadian stocks continued their upward trajectory on Thursday, building on gains from the two preceding sessions. The S&P/TSX Composite Index began the day with an advance and maintained this momentum, closing the session up by 208.48 points, or 0.9%, reaching a new record high at 24,845.93.
The sustained rally on Bay Street was fueled by the Federal Reserve's anticipated move to reduce interest rates by a quarter of a percentage point. Following an aggressive rate cut of half a percentage point in September, the Fed adjusted the target range for the federal funds rate downwards by 25 basis points, setting it between 4.50% and 4.75%.
This decision was attributed to improved labor market conditions and inflation moving closer to the Fed's 2% target. Nonetheless, the Fed noted that the risks to achieving its long-term objectives of maximum employment and stable inflation remain balanced.
During a press conference following the meeting, Fed Chair Jerome Powell emphasized that monetary policy decisions are not predetermined and would be approached on a "meeting by meeting" basis.
In the markets, technology stocks experienced a significant boost, mirroring similar movements in the U.S., with the S&P/TSX Capped Information Technology Index surging by 1.7%. Additionally, a pronounced rise in gold prices bolstered gold stocks, as seen in the 1.4% increase in the S&P/TSX Global Gold Index.
Meanwhile, commercial real estate stocks showed notable strength, in contrast to telecom stocks, which faced downward pressure, leading to a 1.2% decline in the S&P/TSX Capped Communication Services Index.
