TORONTO 鈥� Canada's main stock index gained one per cent Wednesday in a broad-based rally led by utilities, telecom and technology stocks, while U.S. markets also rose, particularly after the U.S. Federal Reserve announced it is maintaining its key interest rate.聽
The S&P/TSX composite index closed up 205.53 points at 19,079.
In New York, the Dow Jones industrial average was up 221.71 points at 33,274.58. The S&P 500 index was up 44.06 points at 4,237.86, while the Nasdaq composite was up 210.23 points at 13,061.47.
Much like the Bank of Canada did in October, the Fed left its overnight rate untouched Wednesday, saying recent pressure from longer-term Treasury yields on the stock market has helped slow the economy as the central bank continues its fight against inflation.聽
However, the Fed didn鈥檛 rule out more hikes. Chairman Jerome Powell said the Fed isn鈥檛 confident enough that its benchmark rate is high enough.聽
鈥淚t takes time, we know that, and you can鈥檛 rush it,鈥� Powell said. 鈥淪lowing down is giving us a better sense of how much more we need to do, if we need to do more.鈥�
The comments by Powell indicate rates are going to stay higher for longer, said Ashish Utarid, assistant vice-president of investment strategy with IG Wealth Management.聽
鈥淭hey were very specific that the full effects of rate increases have not been felt by the economy yet,鈥� he said.
Another hike from the Fed is possible, but unlikely, said Utarid. Meanwhile, he doesn鈥檛 think the central bank will start cutting until late next year.聽
With two pauses in a row, markets now have more certainty about the months ahead, said Utarid 鈥� and markets like certainty.聽
鈥淭hat's one of the reasons why we believe equities will benefit over the next 12 to 18 months,鈥� Utarid said.聽
Some economic indicators, including GDP, have continued to come in hotter than expected, he said, while others, like the manufacturing data released Wednesday, have on the weaker side.聽
Because of this, the Fed has to strike a delicate balance, said Utarid.聽
鈥淭hat鈥檚 why the rate stayed unchanged,鈥� he said.聽
The Canadian dollar traded for 72.07 cents US compared with 72.09 cents US on Tuesday.
The December crude contract was down 58 cents at US$80.44 per barrel and the December natural gas contract was down eight cents at US$3.49 per mmBTU.
The December gold contract was up down US$6.80 at US$1,987.50 an ounce and the December copper contract was unchanged at US$3.65 a pound.
鈥� With files from The Associated Press
This report by The Canadian Press was first published Nov. 1, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)聽
Rosa Saba, The Canadian Press
Note to readers: This is a corrected story. A previous version misstated the direction of the gold contract's movement.
