Canada’s main stock index opened at a record high on Wednesday, led by a surge in Shopify (SHOP-T) shares after the e-commerce company’s revenue forecast exceeded estimates, while gains in gold prices lifted mining stocks.
The Toronto Stock Exchange’s S&P/TSX Composite index gained 1.5 per cent at 9:30 a.m. ET.
Ottawa-based Shopify jumped over 18 per cent in early trading after it projected current-quarter revenue growth above Wall Street estimate, signaling the company’s AI efforts were drawing more merchants to its suite of e-commerce services.
The company’s solid outlook and a second-quarter revenue beat are set to quell investor concerns about growing competition from new AI tools targeting small businesses that have dented Shopify’s shares.
Wall Street’s main indexes opened higher on Wednesday, as hopes of a Middle East peace breakthrough offset the slide in shares of SpaceX and AMD after the upbeat forecasts issued by the companies failed to impress investors.
The Dow Jones Industrial Average rose 180.2 points, or 0.33 per cent, to 54,266.12. The S&P 500 rose 35.1 points, or 0.45 per cent, to 7,771.62, while the Nasdaq Composite rose 113.0 points, or 0.43 per cent, to 26,698.018 at the opening bell. (
Elon Musk-led SpaceX’s revenue nearly doubled and operating losses narrowed in its first earnings report since going public, fueled by its booming Starlink satellite communications and AI businesses.
But the rocket company’s shares slid 10.9 per cent in early trading after executives flagged the spending spree underpinning its lofty ambitions was far from over. Shares could face additional pressure from the expiry of the stock’s post-IPO lock-up period starting on Thursday. Musk’s other company, Tesla, slipped 1.3 per cent.
“This is the culmination of the story of this entire earnings season. SpaceX beat analysts’ expectations on revenue, but spending on AI is getting out of hand, with no signs of slowing down anytime soon,” said Nic Puckrin, cross-asset analyst and founder of Coin Bureau.
Advanced Micro Devices forecast quarterly revenue above estimates, reflecting strong AI demand. However, shares slipped 6.6 per cent, suggesting investors were looking for a stronger outlook to justify the stock’s 142-per-cent jump this year.
Rival Nvidia’s shares, which have lagged AMD this year, rose 2.9 per cent, also underpinned by SpaceX’s plans to use the company’s hardware exclusively to build its data centers.
Investors also weighed a slew of earnings from other sectors. Drugmaker Eli Lilly was up 7.1 per cent after raising its full-year revenue forecast, while Disney rose 3.8 per cent after beating third-quarter profit expectations.
Arista Networks jumped 12 per cent, as the networking equipment maker forecast third-quarter revenue above estimates. Uber lost 5.7 per cent after forecasting current-quarter adjusted earnings below estimates.
On the data front, an ADP survey showed that the economy added 44,000 jobs in July, missing economists’ expectations of 70,000. The bigger focus will be on the official non-farm payrolls figures on Friday.
A survey on services sector activity during the previous month is also due at 10 a.m. ET.
Data has broadly reflected robust economic performance, but with Middle East tensions keeping energy costs elevated and the Federal Reserve offering no forecasts on monetary policy, uncertainty persists.
Minneapolis Fed President Neel Kashkariin an interview with CNBC said he believed now is the time to start slowly moving interest rates higher.
Remarks from Governor Lisa Cook and San Francisco Fed President Mary Daly will be scrutinized for their perspectives on interest rates.
Traders are pricing in a 58.4 per cent chance of a rate hike in September, the CME Group’s FedWatch Tool showed.
World stock markets edged higher on Wednesday as robust earnings and renewed enthusiasm for technology shares pushed Wall Street to record highs, while hopes for progress on opening the Strait of Hormuz pushed oil prices and bond yields lower.
European shares inched up as investors awaited signs of progress in the U.S.-Iran negotiations.
The pan-European STOXX 600 index was last up 0.1 per cent.
Drugmaker Novo Nordisk, one of Europe’s biggest companies by market value, was down 4.2 per cent after disappointing sales of its Wegovy weight-loss pill overshadowed a strong second-quarter earnings beat.
HSBC shares fell nearly 3 per cent a day after its results as investors digested analysts’ reaction to the figures.
Fresh evidence of heavy spending on AI infrastructure helped lift Japan’s Nikkei 3.7 per cent to its highest since July 23, while South Korea’s market continued its volatile run, closing 3.8 per cent higher.
MSCI’s broadest index of world shares rose 0.4 per cent.
Sentiment was supported by weaker oil prices after Qatar said mediators were making progress in efforts to end the U.S.-Iran war, though details were lacking.
Brent crude rose over 50 US cents, or 0.7 per cent, to US$79.95 a barrel, a long way from its July peak of US$102, while U.S. crude rose 14 US cents to US$75.90, after reports of attacks on a Saudi Arabian vessel in the Red Sea.
In the Strait of Hormuz, flows were proving more resilient than first thought, perhaps reaching 40 per cent to 45 per cent of pre-war levels last week, said John Oh, an energy economist at CBA, observing ship tracking numbers.
“We estimate that traffic flows only need to return to 50 per cent to 60 per cent of pre-war levels to assert oversupply conditions in global oil markets,” he wrote in a note, adding it helped to explain why Brent oil futures had dipped into the US$70s.
The pullback in oil provided some relief from inflation fears and boosted bonds globally, with 10-year Treasury yields now at 4.606 per cent, down from last week’s high of 4.747 per cent.
The next round of U.S. economic data, including Friday’s jobs report and next week’s inflation readings, will be closely watched by the Federal Reserve, said James Rossiter, head of global economics at TD Securities.
If the Fed shifted from holding rates steady to a tightening cycle, “markets would respond vigorously,” Rossiter said.
Markets also lowered the probability of a September Fed rate hike to 57 per cent from 67 per cent.
Fed Bank of Kansas City President Jeff Schmid used a speech on Tuesday to call for tighter policy to help bring inflation back to the central bank’s 2 per cent target.
The euro was roughly flat at US$1.1540, just below its recent six-week high of US$1.1559. The dollar steadied at 157.75 yen, with the threat of intervention still hanging over the market.
U.S. Treasury Secretary Scott Bessent said he was sure Bank of Japan Governor Kazuo Ueda would “do what is best” for Japan’s economy, which markets took as encouragement to raise interest rates further.
Japan and the United States launched a rare joint yen-buying intervention last week and pledged further action if necessary to support the currency.
In commodity markets, the drop in yields helped non-interest-paying gold up 2.2 per cent to US$4,166 an ounce.
Reuters
