Canadian Stocks Rise Amid Budget And Rate-Cut Expectations

(RTTNews) - Canadian stocks edged higher on Wednesday as market focus shifts to the upcoming budget along with increasing expectations of central bank rate cuts despite an extended pullback by bullion prices weakening metal and mining stocks.

After opening slightly below yesterday's close, the benchmark S&P/TSX Composite Index remained volatile for most part of the trading session before finally closing at 29,982.98, up by 94.16 points (or 0.32%).

Nine of the 11 sectors posted gains today, with the energy sector leading the pack.

Canadian Prime Minister Mark Carney's government is presenting the budget on November 4, and it is set to include huge spending cuts as well as funding for major initiatives aimed at boosting the overall business and national sentiment that has been hit by the Canada-U.S. tariff war.

Yesterday, Carney exercised caution when responding to a newspaper report which stated that Canada may soon ink a deal with the U.S. on steel and aluminum sectors, stating that he does not want to overplay it.

Carney is set to travel to Malaysia, Singapore, and the Republic of Korea from October 24 to November 1 to deepen trade relationships in the Indo-Pacific region.

Notably, Carney's recent visit to the U.S. did not result in any breakthrough on tariffs.

As the Bank of Canada is set to announce its interest rate decision on October 29, expectations for a rate cut are increasing

Despite a solid gain of 60,000 jobs and an unemployment rate steady at 7.1% in September, Bank of Canada governor Tiff Macklem noted last week that the labour market has been soft over the course of many months.

On Tuesday, halting its recent record rally, gold prices went on a tailspin. The Front Month Comex Gold for October delivery nosedived to $4,087.70 per troy ounce yesterday. Today, it again fell sharply to $4,044.40 per troy ounce.

The metals and mining stocks of the materials sector experienced a setback pulling the index down.

Canadian automobile, steel, and aluminum sectors are slowly feeling the pain of U.S. tariffs with, many businesses domestically laying off workers or slowing hiring.

Automaker Stellantis announced reshoring a part of its production back to the U.S., leading to several job losses.

U.S. President Donald Trump's slashing of support to Electric Vehicles by ending a tax credit of $7,500 for EV purchases has compelled General Motors to end production in a plant in Ingersoll, west of Toronto; a move leading to thousands of job losses.

Showing interest in ending the Russia-Ukraine war, Trump recently announced plans to meet Russian President Vladimir Putin in Budapest, Hungary to discuss ways to end the three-plus-year war.

Surprisingly yesterday, Trump administration announced that the meeting has been cancelled. When asked, Trump merely responded by stating that he does not want to waste time on it.

Markets are now refocused on concerns of Russian oil and supply disruption due to heavy sanctions by the U.S. and the West.

Canadian energy sector stocks soared today along with the price of crude oil.

In the U.S., the government shutdown entered day number 22 today.

Despite the absence of vital data to gauge the trajectory of the economy, markets are pricing in another rate cut by the U.S. Federal Reserve at its upcoming October 28-29 meeting.

Data released by Statistics Canada yesterday revealed that for the month of September, the year-on-year annual inflation rate in Canada rose to 2.4% from 1.9% in the previous month. For the same month, the month-on-month CPI edged up 0.1%, rebounding from a 0.1% decline in August.

On the business front, Teck Resources Limited (TECK.TO) reported a profit from continuing operations before tax of C$289 million for the third quarter.

Major sectors that gained in today's trading were Energy (1.47%), Consumer Staples (0.82%), Communication Services (0.76%), Real Estate (0.66%), and Industrials (0.52%).

Among the individual stocks, Ces Energy Solutions Corp (5.03%), Athabasca Oil Corp (4.56%), Headwater Exploration Inc (4.18%), Saputo Inc (2.36%), and Cogeco Communications Inc (1.58%) were the prominent gainers.

Healthcare (0.86%) was the only sector that lost in today's trading.

Among the individual stocks, Curaleaf Holdings Inc (5.50%), Sandstorm Gold Ltd (2.12%), Aya Gold and Silver Inc (2.05%), Lundin Gold Inc (1.84%), and Discovery Silver Corp (1.64%) were the notable losers.

Energy Fuels Inc (9.71%) and Canada Packers Inc (5.36%) were among the prime market-moving stocks today.