Canada’s primary stock index reached a historic milestone by surpassing the 30,000 mark for the first time, driven by robust performances in the energy and base metal sectors. Meanwhile, U.S. stock markets exhibited mixed trends during late-morning trading on Tuesday.
The S&P/TSX composite index briefly exceeded 30,000 during early trading before retracting slightly. By 11 a.m. ET, the index was hovering slightly above this significant threshold. In New York, the Dow Jones industrial average rose by 66.27 points to reach 46,381.54. The S&P 500 index also experienced an uptick of 29.39 points, settling at 6,693.75, while the Nasdaq composite surged by 157.50 points to 22,788.98.
Chipmaker Nvidia witnessed a 3.9% surge following its announcement of a $100 billion investment in OpenAI, the proprietor of the AI chatbot ChatGPT. This strategic partnership aims to incorporate at least 10 gigawatts of Nvidia AI data centers to enhance OpenAI’s computational capabilities, solidifying Nvidia’s position as the most valuable company on Wall Street.
Ian Chong, a portfolio manager at First Avenue Investment Counsel, highlighted the significant market impact of this development, emphasizing the positive ramifications for associated stocks. Notably, U.S. utility companies observed an increase in their stock value due to the anticipated surge in electricity demand to power and cool the new data centers.
Oracle Corp. contributed to the market’s upward trajectory with a notable 6.3% gain. This surge followed reports that the tech giant would gain access to TikTok’s algorithm to manage operations for U.S. users, part of the deal to sustain the platform’s operations in the country. Additionally, Apple Inc.’s shares rose by 4.3%, buoyed by strong demand for its recently launched iPhone 17 and growth prospects in the Chinese market.
The tech sector’s strength reverberated across Canada’s main index, with shares of e-commerce platform Shopify Inc. climbing by 2.7%. Chong highlighted the pivotal role of tech stocks in boosting the TSX’s performance. Another key factor driving the index’s growth has been the surge in gold prices, with the December gold contract rising by $69.30 to $3,775.10 per ounce.
Barrick Mining Corp. saw a notable 7.4% increase after unveiling a study indicating that a Nevada project could yield up to 750,000 ounces of gold annually, while Kinross Gold Corp. witnessed a 3.8% rise. Chong noted that despite gold’s strong performance, gold miners had lagged until recently, signaling a period of catch-up and increased momentum in the sector.
As Wall Street continues to set new records, Chong advised investors to focus on high-quality companies capable of delivering long-term value. Emphasizing the importance of prudence and strategic investment choices, he recommended seeking opportunities with firms boasting stable earnings, sustainability, visibility, and robust balance sheets.
In conclusion, the markets’ recent performance underscores the significance of assessing sound investment options to navigate the evolving financial landscape effectively.
