TSX lower as gold rally takes a breather

Investing.com - Canada’s main stock index was down on Thursday, after a surge in gold prices helped the average notch gains in the prior session that left it hovering near all-time highs.

By 12.01 ET, the S&P/TSX 60 index standard futures contract was down by 9 points. 

The S&P/TSX composite index shed 178 point or 0.6% at 30,330.99. 

On Wednesday, index climbed by 0.5% to end at 30,501.99, bringing it within touching distance of a record closing peak logged on Monday.

A jump in gold prices above the $4,000 per ounce mark for the first time helped give lift to the materials sector, which includes metal mining companies, as well as the broader commodities-tilted index. However, the rally lost some steam amid a profit-taking on Thursday (more below).

U.S. stocks down 

U.S. stock was lowers on Thursday, as investors awaited fresh comments from Federal Reserve Chair Jerome Powell as well as statements from a slate of other officials at the central bank.

Markets were also pouring through minutes from the Federal Reserve’s latest policy gathering and assessing ongoing euphoria around artificial intelligence that has powered a rally in stocks over much of 2025.

The benchmark S&P 500 had dropped by 14 points, or 0.2%, the tech-laden Nasdaq Composite had dipped by 40 points, or 0.2%, and the blue-chip Dow Jones Industrial Average had fallen by 136 points, or 0.3%.

The benchmark S&P 500 and tech-heavy Nasdaq gained on Wednesday, logging new all-time closing peaks, boosted in large part by AI-fueled mega-cap companies which have driven much of the equity market’s advances this year.

Despite worries around the perceived circular nature of many recent AI-related deals, enthusiasm around the nascent technology has shown few signs of abating.

Little progress has also appeared in breaking an ongoing stalemate in Washington that caused a now more than week old shutdown of the federal government -- possibly threatening to delay the release of more economic data in the days ahead.

Given the enduring AI boom and dearth of fresh gauges of the U.S. economy, traders are not expected to have much to work with prior to the start of the third-quarter earnings season next week, analysts have flagged.

Powell to speak

One event that will be in focus will be Fed Chair Jerome Powell’s welcoming statement via pre-recorded video at a conference on Thursday. Any hint of a hawkish shift in Powell’s language may impact expectations for further interest rate cuts this year, potentially denting hopes for lower borrowing costs that have partly fueled the stock market’s run higher.

Other Fed members, including Vice Chair Michelle Bowman and Governor Michael Barr are also anticipated to deliver remarks. However, as it has been for much of this week, analysts have flagged that the lack of new economic data means that it is unlikely Fed officials will be able to offer comments that could change the narrative around rates.

Markets did have the opportunity to parse through minutes from the Federal Open Market Committee’s September meeting, when the central bank opted to slash interest rates by 25 basis points and suggested that more reductions could be coming by the end of the year.

The minutes indicated that the committee was divided over the path of rates, with much of the debate centering around a slowing labor market and sticky inflationary pressures. Theoretically, a rate cut helps to spur on investment and hiring, albeit at the risk of reigniting price growth.

Most officials "judged that it likely would be appropriate the ease policy further over the remainder" of 2025, although the exact timing and scope of the cuts remained a source of uncertainty, the minutes showed.

In a note, analysts at Capital Economics said the minutes confirmed that most FOMC participants backed bringing down rates to a more "neutral setting," or a level that neither aids nor hinders the wider economy, due to persistent "downside risks" to the employment picture.

"Nonetheless, with ’a majority of participants’ still emphasising the ’upside risks to their outlooks for inflation,’ we remain comfortable with our view that the FOMC will proceed at a slower pace than market pricing suggests," the analysts said.

Following the publication of the minutes, bets that the Fed will slash rates by a further 25 basis points at its upcoming meeting this month were intact.

Pepsi, Delta highlight quiet earnings calendar

On the earnings front, PepsiCo reported third-quarter revenue and profit that surpassed market expectations thanks to strong demand for healthier sodas and energy drink options in the United States.

In a statement, CEO Ramon Laguarta said the drinks and food maker has been working to introduce new products that better meet dietary preferences of U.S. shoppers, and is aiming to overhaul its packaging operations to cater to price-conscious consumers.

The update comes as activist investor Elliott Investment Management, which announced a $4 billion stake in the company in September, has suggested that Pepsi ditch brands like Quaker Oats and even spin off its bottling network in a bid to slash costs and bolster margins.

Shares of PepsiCo were higher by 1.0% in premarket U.S. trading.

Meanwhile, Delta Air Lines said it had averted any significant damage from the shuttering of the U.S. government, even as worries have grown around a batch of flight delays after the furlough of some federal workers.

Speaking to the Financial Times, CEO Ed Bastian said the carrier had experienced no "material impact" from the shutdown, adding that pressure from the impasse in Washington is not likely to reach the levels seen during the last closure in 2018-2019.

Delta, which also posted all-time high operating revenue buoyed by demand from premium customers and lifted its annual outlook, surged by over 6% before the opening bell.

Gold’s record-setting rally takes a breather

Gold prices fell slightly as a ceasefire between Hamas and Israel curbed some safe-haven demand, although the yellow metal still remained close to recent record highs.

Bullion, which has been on a torrid run that has seen its price rip above $4,000 per ounce for the first time, remained underpinned by concerns over Japanese fiscal health, the ongoing U.S. government shutdown, and a political crisis in France. Comments from the Fed minutes which broadly kept wagers on more rate cuts in play gave further support to gold.

Spot gold fell 0.1% to $4,038.30 an ounce, while gold futures for December fell 0.3% to $4,057.87/oz by 06:24 ET.

Oil prices drop

Oil prices slipped after U.S. President Donald Trump announced that Israel and Hamas have agreed to the first phase of a Gaza ceasefire deal, while a second straight weekly rise in U.S. crude inventories added pressure on prices.

As of 06:32 ET, Brent Oil Futures expiring in December fell 0.6% to $65.86 per barrel, while West Texas Intermediate (WTI) crude futures declined 0.6% to $62.15 per barrel. Earlier in the week, modest output restraint from the OPEC+ producer group had offered support, but U.S. stock builds and easing geopolitical risk overwhelmed that lift.

Trump said Israel and Hamas had agreed to the first phase of a Gaza peace plan, including a temporary halt in fighting, the release of hostages, and phased Israeli troop withdrawals.

Israeli Prime Minister Benjamin Netanyahu said he would convene the government on Thursday to approve the ceasefire agreement intended to secure the return of all hostages.

Last month, Trump unveiled a 20-point plan to halt the two-year war between Israel and Hamas. The developments have raised hopes of a de-escalation of tensions in the region, reducing oil’s war-risk premium.