TSX ends session with a fresh all-time high

Investing.com - Canada’s main stock exchange clinched record high on Thursday, following index gains in the prior sessions.

The S&P/TSX Composite index gained 228 points or 0.78% to end the session at 29,407.89. 

Index closed up by 0.4% at 29,179.39 on Wednesday, surpassing a prior all-time peak notched in the preceding session.

A climb in U.S. oil prices helped boost energy stocks in the average, while Cenovus Energy (TSX:CVE) shares gained 4.9% after its CEO told Bloomberg News that it does not plan to increase its bid for oil sands producer MEG Energy.

Elevated copper and gold prices also gave lift to the materials sector, which includes metal mining shares.

U.S. stocks climbs

U.S. stocks jumped Thursday, with release of key consumer price index report as markets firm up expectations for a Federal Reserve rate cut next week.

The Dow Jones Industrial Average gained  616 points, or 1.36%, the S&P 500 index rose 53 points, or 0.81%, and the NASDAQ Composite climbed 157 points, or 0.72%.

Both the benchmark S&P 500 and tech-heavy NASDAQ Composite indices closed at all-time peaks on Wednesday, powered in large part by a surge in Oracle’s shares. The blue-chip Dow Jones Industrial Average, meanwhile, dropped 0.5%.

Key CPI release in spotlight

Helping the wider rally was an unexpected easing in producer price inflation.

August’s producer price index fell 0.1% month-on-month and rose 2.6% year-on-year – well below forecasts – providing fresh evidence of cooling wholesale price pressures.

The data strengthened the case for the Fed to initiate a rate-cut cycle, starting possibly with a quarter-point reduction at its September 17 meeting.

The more widely-watched consumer price index (CPI) is due later in the session.

Economists expect headline inflation to rise 0.3% from the prior month and 2.9% from a year earlier. Core CPI, which excludes food and energy, is forecast to rise 0.2% month-on-month and 3.2% year-on-year.

The Federal Reserve is scheduled to meet next week to decide interest rates, with a quarter-point rate cut more than fully priced in, and thus it would take a large jump in the CPI numbers to derail such a move.

The PPI data "suggests that, for now, firms are absorbing higher input costs linked to tariffs rather than passing them on to consumers," said analysts at ING, in a note. "This could reflect caution around end-demand prospects or a strategic reluctance to raise prices and risk public or political backlash. Either way, it reinforces confidence that the upcoming CPI print is unlikely to exceed 0.3% MoM, which in our view can help cement bets for three 25bp Fed cuts by year-end."

The European Central Bank is scheduled to unveil its own rate announcement later in the session, and is widely anticipated to leave borrowing costs unchanged.

Adobe headlines earnings slate

Headlining the earnings calendar will be software tools provider Adobe Systems (NASDAQ:ADBE), who will report its quarterly returns after the closing bell.

In June, San Jose-based Adobe raised its annual financial guidance, but sentiment surrounding the firm has since turned negative, with many investors flagging that the Photoshop-maker faces "significant cyclical and secular headwinds," analysts at Vital Knowledge said in a note.

Crude slips on tepid U.S. demand

Oil prices slipped lower on weak demand in the United States, after logging strong gains this week on heightened geopolitical tensions in Russia and the Middle East.

At 12.05 ET, Brent futures dropped 1.6% to $66.39 a barrel, and U.S. West Texas Intermediate crude futures fell 1.87% to $62.48 a barrel.

U.S. crude inventories rose by 3.9 million barrels in the week to September 5, the Energy Information Administration said late Wednesday, against expectations of a draw of 1 million barrels.

Gasoline stocks also rose, adding 1.5 million barrels, against expectations of a draw of 200,000 barrels.

Evidence of a slowing U.S. economy will raise concerns that demand in the largest energy consumer in the world is set to slow as the year progresses.

Gold edges lower

Gold prices retreated as investors turned cautious ahead of key U.S. inflation data, but the metal stayed close to record highs on firm expectations that the Fed will cut interest rates next week.

At 07:06 ET, spot gold was down 0.5% at $3,620.83 per ounce and U.S. gold futures for December fell 0.6% to $3,658.40.

Gold prices have increased nearly 40% this year amid U.S. President Donald Trump’s aggressive trade policy, conflicts in the Middle East and Ukraine, and central bank buying.

(Reuters contributed reporting.)