TORONTO 鈥� Energy and base metals stocks led Canada's main stock index higher on the first trading day of 2025, while U.S. stock markets started the year in the red.
鈥淚t certainly was a choppy first trading day of 2025,鈥� said Anish Chopra, managing director with Portfolio Management Corp.
U.S. markets drooped halfway through the day, likely in part due to new data showing fewer workers applied for unemployment benefits last week than expected, said Chopra, the latest sign of a robust job market even under the pressure of higher interest rates.
With bond yields up and indications that the U.S. Federal Reserve will cut interest rates less in 2025 than previously expected, markets are sensitive to additional data showing the ongoing strength of the economy, said Chopra.
鈥淵ou鈥檝e still got a strong job market, and that ... tends to mean that rates may not go down as quickly as investors have assumed they would,鈥� he said.
After the Fed announced another rate cut in December, it released new projections showing it expects to cut rates twice in 2025 instead of the previously anticipated four.
Certain large names dragged U.S. markets lower Thursday, including Apple and Tesla, which dropped 2.6 per cent and 6.1 per cent, respectively.
Tesla disclosed it delivered fewer vehicles in the last quarter of 2024 than analysts expected.
Meanwhile in Canada, markets moved higher thanks to energy and materials, said Chopra.
After the stellar market performance in 2024, investors will be concerned over whether that strength can continue into the new year, he said.
While the U.S. is entering 2025 gearing up for fewer rate cuts, in Canada it鈥檚 a different story.
鈥淚n Canada, GDP has really stalled out. Unemployment is creeping up, you have interest rates falling ... you also have the 91原创 dollar performing poorly against the U.S. dollar,鈥� said Chopra.
鈥淪o you鈥檝e got a lot of large macroeconomic factors that are weighing on Canada.鈥�
The S&P/TSX composite index was up 170.09 points at 24,898.03.
In New York, the Dow Jones industrial average was down 151.95 points at 42,392.27. The S&P 500 index was down 13.08 points at 5,868.55, while the Nasdaq composite was down 30 points at 19,280.79.
The 91原创 dollar traded for 69.36 cents US compared with 69.50 cents US on Tuesday.
The February crude oil contract was up US$1.41 at US$73.13 per barrel and the February natural gas contract was up three cents at US$3.66 per mmBTU.
The February gold contract was up US$28 at US$2,669 an ounce and the March copper contract was unchanged at US$4.03 a pound.
鈥� With files from The Associated Press
This report by The 91原创 Press was first published Jan. 2, 2025.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The 91原创 Press
