TSX climbs as US inflation data boosts rate-cut hopes

Canada’s main stock index climbed on Friday after a softer-than-expected U.S. inflation report strengthened bets for Federal Reserve interest rate cuts, while investors appeared undeterred by emerging trade frictions between the U.S. and Canada.

At 10:11 a.m. ET, Toronto’s S&P/TSX composite index was up 0.7% at 30,384.11 points, on track to record its second straight weekly advance.

Wall Street indexes were also higher after data showed U.S. inflation rose less than expected last month, keeping the Fed on track to cut interest rates next week.

At home, the Bank of Canada is also set to announce its monetary policy decision on October 29 and markets are currently pricing in about 94% chances of a 25-basis-point easing, swap market data showed.

“The big picture is we have the (Fed and Bank of Canada) meetings next week on the same day, it’s very likely we’ll get rate cuts on both sides of the border and I think any of today’s news hasn’t impacted that calculus on the part of the central bankers,” said Brian Madden, chief investment officer at First Avenue Investment Counsel Inc.

The technology sector led the TSX’s advance both for the day and week, posting 4.7% gains. Cryptocurrency miner Bitfarms saw its shares soar 12.9% after trading firm Jane Street revealed a 5% ownership stake in the company.

Heavyweight financials advanced 0.5%, while consumer discretionary stocks rose 0.4%.

Investors appeared to be unfazed by the uncertainties stemming from U.S. President Donald Trump’s announcement late Thursday that he had terminated all trade discussions with Canada after what he described as a “fraudulent advertisement” featuring former President Ronald Reagan criticizing tariffs.

“Trade talks are off today, they might get on tomorrow… I think investors are understanding this is a part of how the President operates and so they’re not too fussed,” Madden said.

Materials which recorded the week’s worst performance with a 4.5% decline, gained 0.5% on Friday. Meanwhile, energy stocks were up 3.5% for the week and edged up 0.1% during the session.