Traders cut September Fed hike odds to 50.4 percent as Canada and the US report jobs Friday
The S&P/TSX Composite Index closed Thursday at 36,633.12, up 541.51 points or 1.5 percent, its biggest one-day gain in about a month.
According to Reuters, the materials sector rose 3.1 percent as gold, silver, and copper climbed, technology stocks gained 3.7 percent, and financials added 1.4 percent.
Discovery Mining gained 6.5 percent, Lundin Gold added 4.2 percent, and Barrick Mining rose 3.1 percent, the outlet reported, while Thomson Reuters rose 5 percent, tracking gains in US software stocks.
The Canadian Press reported the December gold contract settled up US$125.30 at US$4,539.90 an ounce.
Allan Small, senior investment adviser at iA Private Wealth, told the publication that the materials sector benefited from gains in gold prices, which rose on the back of US interest rate expectations.
CNBC reported that US Federal Reserve Governor Christopher Waller called inflation "meaningfully above" the central bank's 2 percent target, though he pointed to early signs of disinflation.
In a Reuters interview, Waller said he would lean toward holding the federal funds rate at its current setting if the next two weeks of data confirm the trend.
Traders trimmed bets on a Fed rate hike at the mid-September meeting to 50.4 percent from 63.2 percent on Wednesday, Reuters reported, citing CME's FedWatch tool.
The 10-year US Treasury note yield fell more than 2 basis points to 4.772 percent, per CNBC, after touching 4.818 percent on Wednesday, its highest level since November 2023.
The 2-year yield dropped more than 4 basis points to 4.342 percent, the news site reported, and the 30-year yield eased more than 1 basis point to 5.254 percent.
The Dow Jones Industrial Average rose 624.16 points, or 1.18 percent, to 53,686.11; the S&P 500 gained 81.11 points, or 1.06 percent, to 7,747.71; and the Nasdaq Composite added 366.23 points, or 1.40 percent, to 26,584.06, Reuters reported.
The Bank of Canada held its benchmark interest rate at 2.25 percent on Wednesday, a move widely expected by economists, according to The Canadian Press.
A Reuters poll of economists predicts Canadian employers added 15,000 jobs in August, with the unemployment rate unchanged at 6.4 percent, the publication reported, citing LSEG Data & Analytics.
Reuters puts expectations for the US August employment report at 56,000 jobs added and an unemployment rate steady at 4.1 percent.
Small told The Canadian Press the Bank of Canada is on hold, and said higher inflation paired with strong employment could open the door to a rate increase.
A softer Canadian jobs print would leave the bank without the "wiggle room" to move, he said, because growth concerns would take over.
The Canadian dollar traded for 72.52 cents US, compared with 72.13 cents US on Wednesday, the news site reported.
XTB research director Kathleen Brooks pointed to signs of stabilisation in bonds and stocks, in comments to Reuters.
Inflation concerns have not gone away and bonds could sell off again, according to Brooks, though a rough start to September leaves room to "take a breather."
CFRA Research's Sam Stovall told CNBC that oil prices staying "stubbornly high" would leave higher rates as "a hurdle for investors to have to overcome."
He said the Fed chair has signalled more focus on inflation than payrolls, so a weak payrolls print would likely not shift that position, while a strong one would confirm the concern.
According to Stovall, "you can't really say that the all-clear has been signaled."
West Texas Intermediate crude futures rose 0.32 percent to settle at US$91.30 per barrel, while Brent futures fell 0.12 percent to US$95.52, per CNBC.
Canada's trade surplus narrowed sharply in July, weeks before Washington's new 50 percent tariffs begin to show up in statistics, Reuters reported.
