The close: Resource shares lift TSX ahead of jobs reports

Canada’s main stock index rose on Thursday, led by gains in commodity-linked shares, as long-term borrowing rates held near their lowest levels in months ahead of the release of U.S. and Canadian employment reports.

The S&P/TSX composite index ended up 84.08 points, or 0.4%, at 22,229.10. Major indexes on Wall Street were nearly unchanged.

Data due on Friday is expected to show Canada’s economy adding 22,500 jobs in May and the unemployment rate ticking up to 6.2% from 6.1%. U.S. jobs data for May is also due, expected to show an increase of 185,000.

Weaker-than-expected U.S. data could see U.S. bond yields extend their recent move lower, said Mike Archibald, a portfolio manager at AGF Investments.

“If that’s the case then that likely means the (U.S.) dollar is moving lower and commodities would do ok in that environment,” Archibald said.

Bond yields have moved lower in recent weeks as investors raised bets on the Federal Reserve cutting interest rates as soon as September. The U.S. 10-year rate was trading on Thursday at about 4.28%, nearly its lowest level since April 1.

The Bank of Canada on Wednesday became the first G7 central bank to ease rates. Next in line was the European Central Bank, which cut on Thursday.

The materials group on the TSX rose 2.5% as gold and copper prices climbed. The energy sector, which had weighed on the TSX earlier this week, added 1% as the price of oil settled 2% higher at $75.55 a barrel.

Among the sectors that lost ground was technology. It was down 0.4% along with declines for U.S. tech shares.

Heavily-weighted financials also ended lower, falling 0.3%.

In U.S. markets, benchmark S&P 500 and Nasdaq rose early and reached fresh intraday record highs, but then they retreated as technology stocks dipped.

Utilities and industrials were the two other sectors that dragged the S&P 500 lower. The gainers were led by consumer discretionary and energy. Nvidia fell 1.1% and was back to being the world’s third most valuable company the day after it jumped ahead of Apple to take second place.

The Dow Jones Industrial Average rose 78.84 points, or 0.20%, to 38,886.17, the S&P 500 lost 1.07 points, or 0.02%, to 5,352.96 and the Nasdaq Composite lost 14.78 points, or 0.09%, to 17,173.12.

Gains in Nvidia and other AI-related players have largely driven Wall Street’s rally this year, with the chipmaker accounting for roughly a third of the S&P 500′s year-to-date gains of over 12%.

Traders see a 68% chance of a September rate reduction, according to the CME’s FedWatch tool, and have priced in about two cuts this year, as per data from LSEG. Forecasters polled by Reuters also expect two cuts.

Shares of GameStop surged 47% after the online stock influencer known as “Roaring Kitty” posted on YouTube that he would hold a livestream on Friday.

Lululemon Athletica rose 4.8% after beating expectations for first-quarter profit and revenue on Wednesday.

U.S.-listed shares of NIO dropped 6.8% after the Chinese electric vehicle maker posted a quarterly net loss.

Five Below slumped 10.6% after the discount store operator trimmed its annual net-sales forecast.

Advancing issues outnumbered decliners by a 1.05-to-1 ratio on the NYSE. On the Nasdaq, 1,729 stocks rose and 2,445 fell as declining issues outnumbered advancers by a 1.41-to-1 ratio. The S&P 500 posted 25 new 52-week highs and 5 new lows while the Nasdaq Composite recorded 57 new highs and 110 new lows. Total volume of shares traded across U.S. exchanges was about 10.4 billion, compared with the 12.7 billion average over the last 20 trading days.

Reuters, Globe staff

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