TORONTO — Canada's main stock index rose in Friday trading amid strength in industrial and financial stocks, while U.S. markets also gained.
The S&P/TSX composite index was up 74.45 points at 25,971.93.
The reaction of Canadian stocks to oil price swings this week was positive news, said Pierre-Benoit Gauthier, vice-president of investment strategy for IG Wealth Management.
He noted oil prices were very volatile on the back of rumours surrounding a potential nuclear deal between the U.S. and Iran.
“That would bring total production supply up, which usually would hurt oil companies, but still Canadian markets took it in stride and rose all week long,” said Gauthier.
“It once again just shows the resilience of the market right now and how there's buying pressure coming from everywhere. Probably a lot of people were out on the market and are seeing the rally now and trying to get back in.”
Next week, all eyes will be on the latest inflation reading expected to be released Tuesday by Statistics Canada. The annual inflation rate for April is expected to cool compared with March, when the rate stood at 2.3 per cent, as April saw the end of the consumer carbon levy.
Gauthier said the latest Consumer Price Index figure will serve as a key indicator for the Bank of Canada’s next rate cut decision in early June.
“The CPI number next week will surely give us a clue to show, ‘Are we going to get a rate cut, or are we going to be on pause?’” he said.
“It's not all about the CPI number, but it's going to be another brick in the wall, another clue for the next Bank of Canada decision.”
In New York, the Dow Jones industrial average was up 331.99 points at 42,654.74. The S&P 500 index was up 41.45 points at 5,958.38, while the Nasdaq composite was up 98.78 points at 19,211.10.
Gauthier said the rally by U.S. stocks over the past week came “a speed that is unheard of.”
The closely watched U.S. consumer sentiment index was released on Friday; it showed the measure fell slightly in May for the fifth straight month.
According to the preliminary reading, sentiment declined 2.7 per cent on a monthly basis to 50.8, the lowest since June 2022. Since January, sentiment has tumbled nearly 30 per cent, as Americans have largely taken a sour view about where the economy is headed in the wake of President Donald Trump’s imposition of huge import duties.
But Gauthier said that sentiment-driven “soft data” is overshadowed by “hard data” such as actual spending trends, which continue to rise.
“People hear what's happening on the news. They feel strongly about it. They feel bad about it, but it's not enough to keep them from spending,” he said.
“As long as there's no mass layoffs, as long as people are working and the money is coming in, they're going to spend.”
U.S. government data released Thursday showed U.S. consumers spent slightly more at retail stores last month after ramping up their shopping in March to get ahead of tariffs. It said sales at retail stores and restaurants rose just 0.1 per cent in April from March, marking a slowdown from a 1.7 per cent gain in the previous month.
The big increase from February to March was fuelled by a surge in car sales that reflected an effort by consumers to get ahead of the new auto tariffs that went into effect this month.
“People may say that they feel this (situation) is the worst since god knows when, but at the same time, personal spending is still at an all-time high,” said Gauthier.
“As long as people spend, the show goes on.”
Stocks also rallied this week after the U.S. and China agreed on a 90-day pause for most tariffs, while encouraging reports on inflation have raised hopes the Federal Reserve will cut interest rates later this year if the economy falters.
The Canadian dollar traded for 71.54 cents US compared with 71.51 cents US on Thursday.
The July crude oil contract was up 82 cents US at US$61.97 per barrel and the June natural gas contract was down three cents US at US$3.33 per mmBTU.
The June gold contract was down US$39.40 at US$3,187.20 an ounce and the July copper contract was down nine cents US at US$4.59 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published May 16, 2025.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Sammy Hudes, The Canadian Press
