TORONTO — Canada's main stock index made gains Tuesday to close at another record high after a mixed inflation report, while U.S. markets ended down.
The Canadian market, which was closed Monday, ended up 83.70 points at 26,055.63, helped by commodity strength while telecoms and utilities also gained.
The day's gains add to a fairly steady streak in May, while markets are up more than 12 per cent from the recent April 8 low on U.S. tariff fears.
In New York, the Dow Jones industrial average was down 114.83 points at 42,677.24. The S&P 500 index was down 23.14 points at 5,940.46, while the Nasdaq composite was down 72.75 points at 19,142.71.
U.S. markets have also seen a steep recovery from the April lows, but are caught between mixed signals, said Brianne Gardner, senior wealth manager at Velocity Investment Partners, Raymond James.
"We're starting to see some solid retail earnings that is still suggesting consumer spending and consumer strength, but I do still see tariff pressure, and a deficit-expanding tax bill add to really policy uncertainty, so that's potentially limiting investor conviction."
The mixed picture means markets could tread sideways from here, she said. Retail investors are however showing increased confidence, with the largest intraday retail flows ever on Monday, she said.
"You're starting to see that the retail investor is comfortable again putting cash to work."
In Canada, the main TSX index rose on a day that showed the annual inflation rate reached 1.87 per cent in April, down from 2.3 per cent in March.
But StatCan said the end of the consumer carbon price was a big cause of the drop. Excluding energy, inflation came in at 2.9 per cent for the month compared with 2.5 per cent in March.
"Canadians are digesting the latest inflation data, which looks to be telling almost two different stories," said Gardner.
With core inflation showing stubbornness, the chances of the Bank of Canada cutting rates at its June 4 meeting has dropped from around 65 per cent to under 40 per cent, she said.
Investors could get a further glimpse into the wider inflation picture as several big U.S. retailers including Lowe's, Target and TJ Maxx are set to report Wednesday, coming after Walmart warned that tariff-related price hikes are on the way.
"It'll be interesting to see what their projections are, if they will follow Walmart's pricing decision, and also follow that tone on a broader sector about potentially raising prices on a range of goods due to tariffs," said Gardner.
The Canadian dollar traded for 71.76 cents US compared with 71.54 cents US on Friday.
The July crude oil contract was down 11 cents US from Monday at US$62.03 per barrel and the June natural gas contract was up 32 cents US at US$3.43 per mmBTU.
The June gold contract was up US$51.10 at US$3,284.60 an ounce and the July copper contract was down two cents US at US$4.65 a pound.
This report by The Canadian Press was first published May 20, 2025.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press
