Wall Street’s tech titans flexed their muscles Monday, propelling both U.S. and Canadian markets to significant gains as investors returned from the weekend with renewed appetite for technology shares. The S&P/TSX Composite Index closed up 163.78 points at 23,874.19, benefiting from the dual tailwinds of tech sector strength and climbing precious metals prices.
“What we’re seeing is a perfect storm of positive catalysts for Canadian markets,” said Michael Tran, portfolio manager at RBC Capital Markets. “U.S. tech momentum is spilling across the border while our resource-heavy index is simultaneously getting a boost from gold’s continued upward trajectory.”
The tech surge was sparked by Apple’s announcement of breakthrough AI features for its upcoming iPhone 16 lineup, which analysts project could trigger the largest upgrade cycle since 2020. Shopify, Canada’s tech heavyweight, rode this wave to a 3.7% gain, continuing its remarkable 45% year-to-date rally.
Meanwhile, gold prices climbed to $2,745 per ounce, approaching their all-time high as investors seek inflation protection amid uncertain global economic conditions. This lifted the TSX’s materials subindex by 2.1%, with Barrick Gold advancing 2.8% and Franco-Nevada adding 3.2%.
“Gold miners are experiencing their strongest profitability metrics in years,” noted Jennifer Thompson, commodities analyst at BMO Capital Markets. “With production costs largely stable and gold prices near record levels, the cash flow generation is extraordinary.”
The Canadian dollar strengthened to 74.2 cents U.S., up 0.3 cents, as the greenback weakened against most major currencies following mixed economic data. U.S. manufacturing figures came in slightly below expectations, tempering concerns about aggressive Federal Reserve policy.
In the energy sector, oil prices stabilized around $77 per barrel after last week’s volatility, providing modest support for Canadian producers. Suncor Energy gained 0.8%, while Canadian Natural Resources added 1.1%.
Bank stocks showed strength ahead of this week’s inflation data, with Royal Bank of Canada and TD Bank both advancing approximately 1.3%. Financial institutions have been navigating an environment of high but gradually declining interest rates, which has created a complex mix of margin pressures and loan growth opportunities.
“The Canadian market is demonstrating remarkable resilience,” said David Chen, chief market strategist at CO24 Business. “While we’ve underperformed U.S. indices for much of the year, the combination of technology momentum and natural resource strength creates a compelling investment case heading into year-end.”
The broader North American rally reflected growing investor confidence that the Federal Reserve and Bank of Canada can achieve their elusive “soft landing” – taming inflation without triggering a recession. Corporate earnings have largely exceeded lowered expectations, providing further support for equity valuations.
Small-cap stocks joined the party as well, with the S&P/TSX Venture Composite Index rising 2.1%, suggesting risk appetite extends beyond blue-chip names. Technology and mining exploration companies led advances in this segment.
As markets enter the final quarter of 2024, analysts remain cautiously optimistic about Canadian equities, particularly if commodity prices maintain their momentum and tech valuations find support from tangible AI-driven revenue growth rather than just future potential.
The question remains whether this tech-gold combination can sustain Canadian market momentum through year-end, or if investors should prepare for sector rotation as valuation concerns eventually temper enthusiasm for technology’s high-flyers.
