TSX higher as investors assessed inflation data, earnings

Investing.com - Canada’s main stock exchange ended higher on Wednesday gaining strength post mid-day as investors digested both domestic and U.S. inflation data and gauged an incoming raft of earnings reports.

Toronto Stock Exchange’s S&P/TSX composite index gained 98 point, 0.38%, to 27,152.97

The annual Canadian inflation rate accelerated slightly to 1.9% in June, up from 1.7% in May, while the CPI-median gauge -- which is closely tracked by the Bank of Canada -- increased to 3.1% from 3%. The faster pace of price gains dented bets that the central bank may be able to cut rates further, analysts cited by Reuters said.

Meanwhile, financial stocks dropped, weighed down by a volatile reaction on Wall Street to a fresh batch of results from major lenders.

U.S. stocks higher

U.S. stock index closed higher. President Donald Trump denied reports that he was close to firing Federal Reserve Chairman Jerome Powell.

At 12:08 AM ET, theDow Jones Industrial Average rose 231 points, or 0.5%, the S&P 500 index gained 0.3%, and the NASDAQ Composite added 0.3% to clinch a fresh closing record of 20,730.49.

The main Wall Street indexes mostly closed lower on Tuesday, after consumer prices came in broadly in line with expectations, but also showed acceleration in the cost of several products exposed to tariff pressures.

Subdued factory gate inflation

U.S. producer prices held steady on a monthly basis and grew at a slower annualized pace in June, restrained in part by a decline in travel accommodation services costs that helped offset climbing prices for final demand goods.

In the twelve months through June, the producer price index advanced 2.3%, after rising by 2.7% in May, Labor Department data showed on Wednesday. Month-on-month, the reading stood at 0.0%, slowing from a prior level of 0.3%.

Economists had projected a yearly rate of 2.5% and 0.2% on a monthly basis.

The new report comes after data on Tuesday showed that U.S. consumer prices grew at a faster pace in June, indicating that the impact of President Donald Trump’s aggressive tariff policies may be starting to emerge

More tariff uncertainty

Uncertainty over Trump’s tariffs also remained squarely in play. Trump on Tuesday evening said his threatened tariffs on pharmaceutical imports will come by the month-end.

The president also announced on Tuesday that the U.S. would begin placing a 19% tariff on goods from Indonesia as part of a trade deal with the Southeast Asian nation.

The pact comes after the White House revealed preliminary or framework agreements with the United Kingdom (TADAWUL:4280), China, and Vietnam.

Trump has said more deals are on the way, with the clock ticking down closer to an impending August 1 deadline for his so-called "reciprocal" levies to snap into effect. The White House has said the deadline will not be moved, after it was previously delayed following deep market ructions when Trump first unveiled the duties in April.

Q2 earnings season to pick up

There are more quarterly results to digest Wednesday, after results on Tuesday from the likes of JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) largely topped estimates, but still received a mixed response.

Bank executives expressed increased caution over the economic outlook for the second half of the year, with JPMorgan CEO Jamie Dimon flagging “significant risks” from trade tariffs, and warning about the rising fiscal deficit.

On Wednesday, Bank of America (NYSE:BAC) said its profit rose in the second quarter thanks to an uptick in revenues sparked by recent market ructions. Peers Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) are also due to report before the opening bell.

Elsewhere, Johnson & Johnson (NYSE:JNJ) lifted its full-year sales forecast despite looming headwinds from potential U.S. tariffs on pharmaceutical imports.

Crude prices drop

Oil prices slipped, adding to a couple days of losses, even as a group of top producers maintaining its healthy global demand outlook.

At 12:02 ET, Brent futures dropped 0.68% to $68.24 a barrel, and U.S. West Texas Intermediate crude futures declined 0.69% to $66.06 a barrel.

The crude market has seen two days of declines as the market downplayed the potential for supply disruptions after Trump threatened tariffs on purchases of Russian oil.

The Organization of the Petroleum Exporting Countries maintained its oil-demand forecast for 2025 and 2026, expressing optimism that global trade tensions will ease in the coming months.

It stated that the global economy could see stronger-than-anticipated growth in the second half of the year, despite trade conflicts.

Gold inches up

Gold prices rose, recouping some overnight losses after stronger-than-expected U.S. consumer inflation data boosted the dollar and dented bets that interest rates will fall in the near-term.

Still, safe haven demand for gold remained relatively underpinned by persistent concerns over Trump’s trade tariffs. Growing uncertainty over the Federal Reserve’s independence, amid growing calls from Trump and his allies for Chair Jerome Powell’s ouster, also bolstered appeal of the yellow metal, as did tensions between Russia and Ukraine.

Spot gold rose 0.8% to $3,351.26 an ounce, while gold futures for September rose 0.7% to $3,360.00/oz by 12:05 ET.