TSX retreats from its record highs

Investing.com -  Canada’s main stock exchange was lower on Thursday, after the index posted fresh record highs in the prior session.

By 4.05 ET, the S&P/TSX 60 index standard futures contract was down by 5 point, or 0.30%.

The S&P/TSX composite index lost 77 points, or 0.28%, to 27,915.99. It was down from an all-time peak logged earlier in the week.

Underpinning the rally were expectations that the Federal Reserve will slash interest rates at its next meeting in September, as officials respond to signs of relatively muted inflationary pressures and cooling in the American labor market.

Adding fuel to traders’ dovish bets was U.S. Treasury Secretary Scott Bessent, who said he believed a more aggressive half-point rate cut by the Fed was potentially on the table due partially to sharp downward revisions to job growth in June and May.

In theory, lower rates could entice more spending and investment, helping powering U.S. growth. This, in turn, could bolster Canada, which exports a large portion of its goods to the United States.

The Bank of Canada, meanwhile, is anticipated to leave interest rates unchanged at its meeting next month, but indications are growing that officials are beginning to eye a possible drawdown in October.

U.S. stocks flat 

U.S. stock index were almost flat, pausing for breath after recent highs as investors await the release of more economic data to assess the state of the U.S. economy.

The Dow Jones Industrial Average slipped 11 points, or 0.01%, S&P 500 was flat and NASDAQ Composite ended flat as well.

The main averages rose on Wednesday, with the benchmark S&P 500 and tech-heavy NASDAQ Composite logging new all-time peaks and the blue-chip Dow Jones Industrial Average jumping by more than 1%.

PPI, jobless claims data due

Investors will now study a separate gauge of producer prices for final demand later in the session, as they seek to see if a tariff-fueled increase in the cost of some goods is being passed through the system.

ING analysts expect U.S. core PPI to rebound to 3% year-on-year for July, noting that core CPI for the same month was confirmed earlier this week at 3.1%.

“In all probability these inflation rates will be on the rise in the coming 3-6 months, and can easily touch 4% before peaking,” ING analysts said in a note.

“That remains a dominating factor for the long end to worry about, and rate cuts don’t necessarily take long end pain away, in fact they can potentially exacerbate it,” they added.

Elsewhere on Thursday, weekly claims for first-time unemployment benefits are set to be unveiled, with policymakers keeping close tabs on developments in labor demand.

Cisco reports

In the corporate sector, Cisco Systems shares fell premarket after the networking equipment group announced a stronger-than-anticipated first-quarter revenue outlook, but noted some impact from sweeping U.S. tariffs during its just-ended fiscal year.

Coinbase Global stock gained after the cryptocurrency exchange benefiting from bitcoin, the world’s largest cryptocurrency, hit another record high.

Oil climbs ahead of Trump/Putin meeting

Oil prices edged higher, bouncing from the previous session’s weakness ahead of Friday’s meeting between U.S. President Donald Trump and Russian President Vladimir Putin.

At 12.05 ET, Brent futures climbed 1.08% to $66.71 a barrel, and U.S. West Texas Intermediate crude futures rose 1.86% to $63.82 a barrel.

Both contracts hit their lowest in two months on Wednesday after official data showed U.S. crude inventories in the United States unexpectedly rose by 3 million barrels, creating worries over demand in the world’s largest consumer as the important summer driving season draws to a close.

However, traders are also focusing on the meeting in Alaska between the two presidents to discuss an end to the war in Ukraine which has raged since February 2022 and disrupted the oil markets.

Gold prices muted

Gold prices were subdued, as traders assessed hopes for a Fed rate cut next month and awaited the U.S.-Russia talks.

Spot gold edged 0.95% lower to $3,376.00 an ounce, while gold futures for December dipped by 0.2% to $3,400.80/oz by 12.05 ET.

Gold prices sharply decline at the start of the week, when Trump said gold bars would not face tariffs.