Canadian Stocks Rally As Fed Chair Signals Rate Cut

(RTTNews) - Canadian stocks surged on Friday as US Federal Reserve Chair Jerome Powell seemingly hinted at a September rate cut in his speech today at the Jackson Hole Economic Symposium in Wyoming.

After opening higher than yesterday's close, the benchmark S&P/TSX Composite Index saw further upside in early trading and remained firmly positive throughout the session before closing at 28,333.13, up by 277.70 points (or 0.99%).

Notably, this is a new record high for S&P/TSX Composite Index for the second straight session.

In a significant development, while delivering a speech at the Jackson Hole Economic Symposium today, Powell indicated that a potential rate cut could occur during September's central bank meeting, although he refrained from making a definitive commitment.

On the trade front, Canadian high-level officials are engaged in talks with their US counterparts to seek a level playing field without denting common interests.

A Reuters report stated that Canada will remove many retaliatory tariffs on US goods in an Olive branch to President Donald Trump. Levies on US autos, steel and aluminum will remain for now.

As of now, Canadian exports to the US face a 35% tariffs on all goods except those that comply with Canada-United States-Mexico Agreement.

Prime Minister Mark Carney said that he had a "productive and wide-ranging" phone conversation with Trump Thursday morning. A Trump administration official confirmed the call.

Data released by Statistics Canada today revealed that for the month of June, retail sales in Canada advanced by 6.6% year-on-year and retail sales (excluding vehicles) jumped by 1.9% month-over-month.

According to a preliminary estimate, retail sales in Canada are expected to have slumped by 0.8% from the previous month in July.

Following Powell's remarks, CME Group's FedWatch Tool is currently indicating an 83.1 percent chance the Fed will lower rates by a quarter point next month, up from 75.0 percent on Thursday.

Major sectors that gained in today's trading were IT (2.59%), Energy (2.33%), Materials (1.38%), and Real Estate (1.18%).

Among the individual stocks, Lightspeed Commerce Inc (3.93%), Celestica Inc (3.62%), Shopify Inc (3.38%), Cenovus Energy (7.13%), and Baytex Energy Corp (4.98%) were the prominent gainers.

Major sectors that lost in today's trading were Utilities (0.14%), Healthcare (0.33%), Communication Services (0.62%), and Consumer Staples (2.16%).

Among the individual stocks, BCE Inc (1.34%), George Weston Limited 4.10(%), Loblaw CO (3.22%), and Empire Company Ltd (3.10%) were the notable losers.

Energy Fuels Inc (12.02%) and Nexgen Energy Ltd (7.34%) were among the prime market-moving stocks today.