TSX inches up, U.S. markets also rise ahead of rate decision

TORONTO — Strength in base metals helped Canada’s main stock index post a small gain Monday, while U.S. markets also rose.

U.S. markets were muted ahead of a big week for earnings reports, as well as a Wednesday interest rate decision by the U.S. Federal Reserve.

The S&P/TSX composite index closed up 42.38 points at 22011.62.

In New York, the Dow Jones industrial average was up 146.43 points at 38386.09. The S&P 500 index was up 16.21 points at 5116.17,while the Nasdaq composite was up 55.18 points at 15983.08.

This week, “all eyes are going to be on the Fed,” said Brianne Gardner, senior wealth manager of Velocity Investment Partners at Raymond James Ltd.

Coming into the year, markets expected about six cuts to the central bank’s key rate by the end of 2024. But a succession of stronger-than-expected economic reports have eroded those expectations.

“Things are slowing, even though there’s still strong growth and employment figures,” she said. “But high inflation is kind of overshadowing any of these economic gains that we’re seeing.”

Now, expectations are closer to just one cut this year, said Gardner, with some expecting zero.

While the interest rate decision itself appears all but decided, investors will be watching for any comments from Fed officials on their direction, said Gardner.

“Virtually nobody is expecting the Fed to cut rates this week,” she said.

The Fed is likely going to be extra cautious with the presidential election coming up, she added.

Amid a slew of earnings reports this week, several big names could move markets, noted Gardner, including tech giants Amazon and Apple.

The biggest tech companies have been driving the rally that’s characterized much of 2024 on Wall Street, though April has seen somewhat of a correction.

However, “earnings momentum is kind of overshadowing this correction that we started to see in April,” said Gardner.

But volatility will likely be heightened in May and June, she said.

The Canadian dollar traded for 73.22 cents US compared with

73.16 cents US on Friday.

The June crude oil contract was down $1.22 US at $82.63 US per barrel and the June natural gas contract was up

11 cents at $2.03 US per mmBTU.

The June gold contract was up $10.50 US at $2,357.70 US an ounce and the July copper contract was up 11 cents at $4.68 US a pound.