S&P/TSX Composite Gains on Christmas Eve Trading

TORONTO — Canada’s main stock index experienced broad-based gains during the shortened trading session on Christmas Eve, finishing higher. Similarly, U.S. stock markets also recorded increases.

The S&P/TSX composite index rose by 97.84 points, closing at 24,846.82. Most sectors contributed to this rise, with the exception of telecommunications and health care.

In New York, the Dow Jones industrial average climbed by 390.08 points, reaching 43,297.03. The S&P 500 index increased by 65.97 points, concluding at 6,040.04, while the Nasdaq composite experienced a gain of 266.24 points, ending at 20,031.13.

These gains helped offset some recent market declines that followed the U.S. Federal Reserve's latest economic outlook. However, market analysts, including Dustin Reid, the chief fixed income strategist at Mackenzie Investments, suggest that these climbs are more indicative of year-end portfolio adjustments rather than a significant shift in market sentiment.

Reid remarked, “I think it’s mostly just year-end flows that are driving it. I don’t think there’s anything that’s particularly reversed in terms of sentiments since the Fed meeting.” This suggests that the market movements are largely connected to reallocations by geography and shifts in asset classes.

He further explained, “Price movements around month end, quarter end, and year-end can often be driven by flows occurring beneath the surface, which do not necessarily relate to fundamental changes.”

Following the Federal Reserve’s guidance for only two rate cuts in 2025, there was an initial drop in markets earlier. Yet, Reid noted that this guidance was expected, and the resilience of the U.S. economy has contributed to the current market upturn.

On the Canadian side, the markets may be experiencing an influence from anticipated additional rate cuts due to signs of economic softness. Recently, Statistics Canada indicated that their early estimate for November showed a decrease in real GDP by 0.1 percent—the first recorded drop this year.

Reid pointed out, “The negative flash print for November really suggests that the bank is going to have a fair bit more work to do. I think the market is not pricing in enough easing for calendar year 2025 for the Bank of Canada.”

No significant economic data was released on Tuesday to impact market trends.

In currency trading, the Canadian dollar stood at 69.51 cents against the U.S. dollar, slightly up from 69.47 cents on Monday. Additionally, the February crude oil contract witnessed an increase of 86 cents, trading at $70.10 per barrel. The February natural gas contract also rose by 16 cents to reach $3.50 per mmBTU.

In precious metals, the February gold contract advanced by $7.30, priced at $2,635.50 an ounce. Meanwhile, the March copper contract was up by two cents, reaching $4.11 per pound.

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