S&P/TSX up almost 200 points, U.S. stock markets also rise to end rocky week

TORONTO — Canada's main stock index gained almost 200 points Friday as markets broadly rose to end a rocky trading week, with the main U.S. indexes each gaining more than one per cent.

The S&P/TSX composite index closed up 185.54 points at 24,599.48.

In New York, the Dow Jones industrial average was up 498.02 points at 42,840.26. The S&P 500 index was up 63.77 points at 5,930.85, and the Nasdaq composite index was up 199.83 points at 19,572.60.

The rally closed out a tumultuous week for markets, which sank on Wednesday after the U.S. Federal Reserve cut its key interest rate and signalled it plans to cut just twice in 2025. That day, the S&P 500 dropped almost three per cent, and the TSX slid more than two per cent. The Nasdaq lost 3.6 per cent and the Dow was down 2.6 per cent.

“It was one of the single largest drops in a day for 2024,” said Ilana Schonwetter, investment advisor and portfolio manager at Blueshore Financial.

“The last two days we’ve certainly rebounded, so it was a little bit of a knee-jerk reaction.”

The Fed was signalling that it no longer needs to be as proactive about lowering rates because the economy is doing so well, said Schonwetter.

“I think the fundamentals for the U.S. remain very strong,” she said.

That’s not quite the case in Canada, where there’s more concern over the economy, she said.

The political turmoil this week, with Finance Minister Chrystia Freeland resigning and uncertainty over whether Prime Minister Justin Trudeau will step down, added to the shakiness.

On the rate side, the Bank of Canada will likely cut more next year than the Fed, said Schonwetter.

The central bank will be particularly watching the unemployment number, which recently ticked higher, as an indicator of where rates need to go, she said.

However, it's is walking a fine line as too big a divergence between its key rate and that of the Fed could be inflationary, noted Schonwetter, if the weakness in the loonie continues.

The Canadian dollar traded for 69.61 cents US compared with 69.59 cents on Thursday.

The February crude oil contract was up eight cents at US$69.46 per barrel and the January natural gas contract was up 17 cents at US$3.75 per mmBTU.

The February gold contract was up US$37 at US$2,645.10 an ounce and the March copper contract was up two cents at US$4.10 a pound.

This report by The Canadian Press was first published Dec. 20, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Rosa Saba, The Canadian Press