TSX higher after benign July inflation data

Investing.com -Canada’s main stock exchange ended higher on Tuesday as investors looked at benign July inflation data of the U.S. and assessed an extension to a trade truce between Washington and China.

By 12.05 ET, the S&P/TSX 60 index standard futures contract had edged up by 6.1 points, or 0.37%.

The S&P/TSX Composite was up by 146 points or 0.53% at 27,921.26. The index also rose in the prior session by 0.1%.


The uptick came after the index posted its best weekly performance since September last week.

A jump in shares of Constellation Software (TSX:CSU) gave some lift to the technology sector, helping offset a dip in the materials segment stemming from weaker gold prices.

U.S. stocks higher

U.S. stock index were trading higher after the CPI data. 

At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average traded 483 points, or 1.1%, higher, the S&P 500 index added 1.1%, and the NASDAQ Composite rose 1.4%, notching a close of 6,445.31 and 21,681.90, respectively.  

The Bureau of Labor Statistics’ consumer price index, a closely-monitored gauge of inflation, rose by 2.7% in the twelve months to July, data showed on Tuesday. The pace matched that logged in June and was slower than economists’ predictions of 2.8%.

On a month-on-month basis, CPI edged up by 0.2%, in-line with estimates and cooler than 0.3% in June.

However, the "core" CPI, which strips out volatile items like food and fuel, rose 3.1% year-over-year, above the 3.0% expected, and 0.3% on a monthly basis.

Following a weak July jobs report and sharp downward revisions to the readings for June and May, bets have risen to an approximate 90% likelihood that the central bank will slash borrowing costs by 25 basis points at its upcoming gathering in September.

This relatively benign inflation report could partly allay fears that some Federal Reserve policymakers have that U.S. President Donald Trump’s aggressive tariff agenda could drive up inflation.

The main averages on Wall Street slipped in the prior session, although both the tech-heavy Nasdaq Composite and the broad-based S&P 500 indices remain near to all-time highs, helped a broadly successful second-quarter earnings season.

Investors also appeared to pass over President Donald Trump’s announcement of a 90-day extension to a trade truce between the U.S. and China, with the move occurring just ahead of the Aug. 12 deadline.

Trump announces BLS head nominee

Investors will also be digesting Trump’s nomination of economist E.J. Antoni as head of the Labor Department’s Bureau of Labor Statistics in the wake of his decison to fire the previous head, Erika McEntarfer, in the wake of the disappointing jobs report at the start of the month. The Senate must still confirm the appointment.

Trump accused McEntarfer, without proving any evidence, of doctoring the figures to damage him politically.

Sinclair surges on merger options

In the corporate sector, Sinclair shares surged in premarket trading, after the U.S. TV station owner said it was reviewing its business for potential mergers or a ventures unit spinoff.

Specialty chemical company Celanese (NYSE:CE) shares tumbled following its warning that it sees “a softening demand environment across most key end-markets in the second half of the year.”

Tencent Music Entertainment Group (NYSE:TME) stock climbed in premarket trading after the company reported better-than-expected results for the second quarter.

Pony AI stock gained premarket after the Chinese robotaxi operator reported a surge in second-quarter revenue, and said it was on track to reach its year-end vehicle target.

Gold ticks higher

Spot gold prices edged higher after a sharp decline in the previous session, as investors await the U.S. inflation data and gauged the potential for future Fed policy easing.

In early afternoon trading in Europe, spot gold had edged 0.11% higher to $3,346.30 an ounce, while gold futures for December dipped by 0.2% to $3,395.70/oz by 06:36 ET.

Gold prices fell 1.6% on Monday, and futures dropped more than 2% after U.S. President Donald Trump said gold bars would not face tariffs, easing supply concerns.

Crude down 

Crude prices were down even after the extension of the pause on higher tariffs between the United States and China.

At 12.05 ET, Brent futures was down 0.66% to $66.19 a barrel, and U.S. West Texas Intermediate crude futures was down 1.5% to $63.29 a barrel.

Potentially weighing on the oil market, Trump and Russian President Vladimir Putin are due to meet in Alaska on Friday to discuss an end to the war in Ukraine.