Canada’s main stock index opened at a record high on Wednesday, as firmer precious metal prices lifted mining stocks, while solid corporate earnings propelled financial stocks.
At 9:31 a.m. ET, the S&P/TSX composite index was up 0.5 per cent at 34,142.75 points.
Bank of Montreal (BMO-T) rose over 3 per cent in early trading after it beat analysts’ estimates for first-quarter profit, as the lender set aside a smaller than expected sum of money to cover potential loan defaults.
BMO, the third-largest Canadian bank by market capitalization, reported record revenue in each of its segments in part helped by strong fee growth at wealth management and capital markets business, where adjusted earnings rose 16 per cent and 11 per cent respectively.
National Bank of Canada (NA-T) was up 5.3 per cent after it also reported higher first-quarter profit as the acquisition of Canadian Western Bank boosted its personal and commercial banking business.
Wall Street’s main indexes opened higher on Wednesday after volatile sessions earlier this week as investors assessed risks to the AI trade and growing tariff doubts heading into Nvidia’s earnings due later in the day.
The Dow Jones Industrial Average rose 183.1 points, or 0.37 per cent, at the open to 49,357.63. The S&P 500 rose 25.1 points, or 0.36 per cent, at the open to 6,915.15, while the Nasdaq Composite rose 141.3 points, or 0.62 per cent, to 23,005.008 at the opening bell.
February has been a choppy month for U.S. equities as investors questioned if massive AI spending touted by technology giants was actually paying off, while tariff uncertainty further stoked volatility.
Several sectors ranging from software and commercial real estate to trucking and logistics have recently logged steep declines, as new developments in the AI space stoked worries of industry-wide disruptions.
“I see AI disruption continuing as a dominant market theme through this year because AI continues to evolve,” said Sam Stovall, CFRA’s chief investment strategist.
“We are still looking at elevated valuations in the market and there will still be an unwind not only in technology and software in particular, but in other areas as well.”
U.S. President Donald Trump boasted of stock market gains in his State of the Union speech on Tuesday and said that “almost all” countries and corporations want to stick to tariff and investment agreements previously made with the United States.
Trump’s temporary global tariff of 10 per cent came into effect on Tuesday after the Supreme Court’s sweeping ruling last week. He later said the levy would be 15 per cent, but it was unclear when and if it would apply.
Stocks got a boost on Tuesday as sentiment towards AI stocks improved, with the tech-heavy Nasdaq closing more than 1 per cent higher.
All eyes will be on Nvidia’s earnings due after markets close on Wednesday, with AI investors seeking evidence that the chipmaker’s profits are growing on the back of Big Tech’s US$630-billion capital spending budget for 2026.
Nvidia options imply a move of about 5.6 per cent in either direction a day after the company reports results, which is the lowest expected post-results swing ahead of any Nvidia report in at least three years.
Its shares rose 0.8 per cent in early trading, in line with a broader rise in most megacap and growth stocks.
Earnings from major software firms including Salesforce , Intuit and Snowflake will be on the radar later this week, given that the S&P 500 software and services index has slumped almost 23 per cent so far this year.
At least three Federal Reserve officials are slated to speak throughout the day as investors hunt for clues on the future monetary policy path.
MSCI’s world share index was up 0.3 per cent with Europe’s broad STOXX 600 up 0.53 per cent and back at a record high.
More dramatic gains were seen in Asia where the APAC ex-Japan benchmark gauge rose 1.44 per cent driven by advances in chip-heavy bourses like Korea and Taiwan, and Japan’s Nikkei gained 2.2 per cent.
A global memory chip shortage has seen Samsung Electronics and SK Hynix stock prices double since October, as cash has surged up the artificial intelligence supply chain to the enormously popular chipmakers.
And while the AI fever has hurt software stocks globally in recent weeks on fears their business model could be disrupted, they continued to bounce back on Wednesday.
Software stocks posted gains in the U.S. and Europe on Tuesday when AI lab Anthropic announced several new plug-ins developed jointly with partners.
The fact the event “stressed on partnership rather than displacement helped the software sector,” said Mohit Kumar, chief Europe economist at Jefferies.
He said AI disruption would nevertheless remain a market theme.
It’s not only tech stocks driving growth, however. Shares in HSBC – Europe’s largest bank – were up 5.3 per cent in London after it reported profit that beat expectations, and it lifted a key earnings target.
The optimism in equities comes even as investors grapple with a range of political and geopolitical worries, though it did allow U.S. President Donald Trump to boast of stock market gains in his State of the Union speech.
Trump also said “almost all” countries and corporations want to stick to tariff and investment agreements previously made with Washington, but he did not offer clarity regarding his plans for Iran amid signs he is inching closer to a military conflict with Tehran.
We “believe the market is being fairly sanguine around geopolitical risks. While we do not anticipate a drawn-out conflict, any attack from the U.S. is likely to be met with response from Iran and produce some wobbles in risky assets,” said Kumar.
The worries about AI, Iran and tariffs have helped support government bonds in the U.S. and particularly Europe in recent days, although yields were slightly higher on Wednesday.
The benchmark 10-year Treasury yield was up nearly 2 basis points at 4.05 per cent but was still close to Monday’s near three-month low of 4.017 per cent.
Bond yields move inversely to prices.
Most European 10-year government bond yields were also up around 1 basis point, but again are around multi-month lows, and more than one-year lows in the case of British and Italian debt.
Japanese yields, in contrast, rose sharply on Wednesday after the nomination of two academics seen as dovish to the central bank’s board.
While rate-sensitive shorter-dated yields fell on expectations for less-immediate BOJ rate hikes, broader worries that the BOJ is behind the curve sent longer-dated yields higher.
The yield on the 40-year bond, Japan’s longest tenor, rose 10 basis points (bps) to 3.615 per cent, the steepest advance in a month.
That also weighed on the yen, with the dollar up 0.53 per cent at 156.70 yen and the euro 0.58 per cent higher against the Japanese currency at 184.59 yen.
The dollar otherwise was mildly softer with the euro up 0.1 per cent at US$1.1779 and the pound up 0.1 per cent at US$1.3506.
Even currency markets are focused on Nvidia’s results. Francesco Pesole, senior currency analyst at ING said a miss could hurt wider risk sentiment with FX implications, and hit the surging Australian and New Zealand dollars and the Norwegian crown.
In commodity markets, oil continued its march higher driven by concerns over Iran and hovered around a seven-month top.
U.S. crude rose 0.3 per cent to US$65.83 a barrel and Brent rose 0.4 per cent to US$71.06.
Copper was also higher as traders bet on restocking demand after Chinese market participants returned from a nine-day Lunar New Year break, while spot gold rose 0.7 per cent to US$5,182 an ounce.
Reuters
