Tech optimism and cooling inflation fuel market momentum; Canadian dollar and oil prices shift
Oracle’s bold declaration that “AI Changes Everything” and its record-breaking 35.9 per cent stock surge set the tone for a day when technology and artificial intelligence reshaped market momentum, even as Canadian markets found strength in resources and energy, according to BNN Bloomberg.
The S&P/TSX composite index climbed 116.38 points to close at 29,179.39, fuelled by gains in basic materials and energy stocks, as reported by BNN Bloomberg.
Meanwhile, the Canadian dollar slipped to 72.18 cents US from 72.29 cents the previous day.
Oil prices also advanced, with the October crude contract rising by US$1.04 to US$63.67 per barrel, while gold edged down 20 cents to US$3,682.00 an ounce.
South of the border, Wall Street’s S&P 500 index rose 0.3 per cent to a record high for the second consecutive day, driven by a surprisingly positive US wholesale inflation report and Oracle’s forecast for explosive AI-driven growth.
The Dow Jones Industrial Average, however, fell 220.42 points to 45,490.92, while the Nasdaq composite inched up 6.57 points to 21,886.06, as per BNN Bloomberg.
Oracle’s CEO Safra Catz revealed the company had signed four multi-billion dollar contracts in its latest quarter and projected cloud infrastructure revenue to soar 77 per cent to US$18bn this fiscal year, with expectations of reaching US$144bn within four years.
This optimism around AI demand was echoed by Oracle Chairman Larry Ellison’s statement, “AI Changes Everything.”
Despite narrowly missing analysts’ expectations for the quarter, Oracle’s stock posted its best day since 1992.
The broader US market narrative is increasingly anchored on expectations that the Federal Reserve will cut interest rates at its upcoming meeting, as noted by Ahmad Assiri, research strategist at Pepperstone.
This sentiment gained traction after a report indicated that US wholesale inflation unexpectedly slowed in August, alleviating concerns that inflation would remain stubbornly above the Fed’s 2 per cent target, especially amid ongoing tariff pressures.
Chris Larkin, managing director at E-Trade from Morgan Stanley, commented that the inflation update “essentially rolled out the red carpet for a Fed rate cut next week.”
Other technology names also benefited from the AI momentum.
Taiwan Semiconductor Manufacturing Co. saw its US-listed shares climb 3.8 per cent after reporting a 34 per cent year-over-year revenue jump in August.
Klarna, the Swedish “buy now, pay later” provider, leaped 14.6 per cent in its New York Stock Exchange debut.
However, not all sectors participated in the rally.
Apple’s shares fell 3.2 per cent, weighing on both the Dow and the S&P 500, after analysts found little to surprise or excite in its latest iPhone launch.
Synopsys, a chip design firm, dropped 35.8 per cent after reporting quarterly profits below expectations.
Internationally, European indexes were mixed following gains across much of Asia, with South Korea’s Kospi up 1.7 per cent and Hong Kong’s Hang Seng climbing 1 per cent.
In the bond market, the yield on the 10-year US Treasury eased to 4.04 per cent from 4.08 per cent, reflecting renewed expectations for interest rate cuts after the encouraging inflation data.
Novo Nordisk’s US-listed shares edged up 0.1 per cent after the company announced plans to cut 9,000 jobs, mostly in Denmark, to reduce costs amid intensifying competition in the obesity drug market.
