Investing.com - Canada’s major stock indexes ascended Wednesday after closing lower on Tuesday. Investors are anticipating a key U.S. Fed rate decision today. While many don't expect a rate cut, understanding the Fed's outlook on the economy in the midst of a trade war between the U.S. and Canada remains crucial.
By the 12:45 ET, S&P/TSX 60 index was up 18.65 points or 1.25%, after decreasing 5.3 points or 0.4% on Tuesday.
The S&P/TSX Composite’s S&P/TSX composite index rose 285.65 points or 1.16%, continuing the Monday's advancement of 231.71 points or 0.9%, extending a recovery from a four-and-a-half-month low last Thursday.
On Wednesday, economists at BofA Securities projected Bank of Canada to impose an additional rate cut of 25 basis points to 2.50% in April.
Statistics Canada offered February’s CPI report on Tuesday, in which CPI jumped 2.6% in February, surpassing analyst expectations of a 2.1% increase.
However, a forecast from the OECD flagged that Trump’s plans to hike levies will hit growth in Canada, Mexico, and the United States while also pushing up inflationary pressures.
Analysts at Capital Economics argued that the outlook for Canadian financial markets widely depends on the reaction by the Bank of Canada to any fallout from the U.S. tariffs. Last week, the BoC slashed interest rates by 25 basis points and raised worries over inflation and weaker growth from the duties.
U.S. stocks enjoy boost
U.S. stocks enjoyed a rise on Wednesday, after slipping til close on Tuesday, amid cautious trading ahead of this week’s Federal Reserve meeting.
As of 12:45 ET, the Dow Jones Industrial Average was up 270 points or 0.65%, the S&P 500 was up 42.3 points or 0.75%, and the NASDAQ Composite was up 158.7 or 0.9%.
This follows negative results on Tuesday, as the Dow had fallen by 260.3 points, or 0.6%, the S&P edged down by 60.5 points or 1.1%, and the Nasdaq dropped 304.6 points, or 1.7%.
"[T]echnical conditions continue to favor bulls in the immediate term, although this source of upside pressure is being exhausted," analysts at Vital Knowledge said in a note to clients.
Oil gains
Oil prices advanced on Wednesday, after falling on Tuesday, as investors weighed the potential of Russian oil in global markets.
As of 12:50 ET, Crude Oil WTI Futures climbed 0.94% to $67.38 a barrel after Tuesday's losses, while Brent Oil Futures were up 0.9% to $71.18 a barrel after yesterday's drop.
The major news of the day was that Russia agreed to U.S. President Donald Trump’s proposal that Moscow and Kyiv temporarily stop attacking each other’s energy infrastructure. This move could potentially allow Russian oil to enter global markets.
Israel launched extensive airstrikes across the Gaza Strip on Tuesday, marking the most significant escalation since the January ceasefire, with Prime Minister Benjamin Netanyahu authorizing the operations following stalled negotiations to extend the ceasefire and unresolved hostage situations.
Gold notches record high, continues rise
Gold prices continued rising on Wednesday after hitting another record high above $3,000 on Tuesday as heightened geopolitical ructions in the Middle East -- particularly the breaching of the Israel-Hamas ceasefire -- fueled safe haven demand.
By 12:45 ET, Gold Futures were up 0.01% to $3,041.36.
