Canadian Stocks Soar As Expectations For Fed Rate Cut Gain Vigor

(RTTNews) - Canadian stocks surged on Monday, extending Friday's gains, aided by expectations of another U.S. Federal Reserve rate cut in December getting firmer after recent remarks by two Fed officials.

After opening just above the previous week's close, the benchmark S&P/TSX Composite Index soon gained momentum to trade on the upside throughout the session before settling at 30.604.35, up by 443.70 points (or 1.47%).

Seven of the 11 sectors posted gains today, with the IT sector leading the pack.

In the U.S., key economic reports that were delayed due to the government shutdown are being released one after other since the shutdown ended two weeks ago.

The employment data indicated a cooling labor market despite contrasting assessments by the private data releases.

After the October 29 rate cut instituted by the U.S. Federal Reserve, several Fed officials have been expressing divergent views about the need for another rate cut this year.

Against the backdrop of recent jobs and inflation numbers, last Friday, John Williams, President and CEO of the Federal Reserve Bank of New York, indicated he expects the central bank to lower rates due to the ongoing labor market weakness and stressed that "there is room for further adjustment."

Today, Federal Reserve Governor Christopher Waller told Fox Business he is in favor of an interest rate cut in December due to concerns about the labor market.

Dovish comments from the U.S. Fed officials have reaffirmed investors' expectations for another rate cut next month.

Currently, markets are betting on a 79.1% chance of a rate cut by the Fed in December as indicated by CME Group FedWatch Tool.

Investors also anticipate other key data releases on vital indicators viz., employment numbers, retail sales, and producer price figures due to come out this week to gain more insights on the economy and to gauge the monetary policy track of the U.S. Fed.

On the sidelines of G20 summit held in Johannesburg, South Africa, Prime Minister Mark Carney and Indian Prime Minister Narendra Modi discussed prospects of increasing bilateral trade ties in key sectors.

Following the talks, Modi invited Carney to visit India in early 2026, which Carney has accepted.

Carney is working hard to reverse the slowdown in the nation's economy that is suffering from U.S. President Donald Trump's tariffs (of 35%) on Canadian exports to the U.S.

Steel, aluminum, automobile, and soft lumber sectors are bearing most of the brunt resulting in tens and thousands of layoffs.

Making things further difficult for Canada, Trump suspended trade talks between both the nations, irked by an anti-tariff advertisement created by Ontario's government. Trump did not relent even after an apology by Carney.

Carney stated yesterday that Canada will re-engage on tariff discussions with the U.S. when it is appropriate.

Data released by Statistics Canada today revealed that Canada's manufacturing sales are expected to fall 1.1% in October after a 3.3% increase in September with a sharp descent projected in the chemical and wood product subsectors.

Major sectors that gained in today's trading were IT (5.54%), Materials (5.06%), Healthcare (1.10%), Utilities (0.30%), and Consumer Discretionary (0.26%).

Among the individual stocks, Bitfarms Ltd (15.50%), Celestica Inc (14.95%), Shopify Inc (5.21%), Fortuna Mines (10.44%), Aris Gold Corporation (10.36%), and Orla Mining Ltd (9.07%) were the prominent gainers.

Major sectors that lost in today's trading were Communication Services (0.16%), Industrials (0.20%), Real Estate (0.73%), and Consumer Staples (1.61%).

Among the individual stocks, Maple Leaf Foods (2.23%), Empire Company Ltd (2.05%), Metro Inc (1.85%), Firstservice Corp (2.02%), and Crombie Real Estate (1.49%) were the notable losers.