Canadian Stocks Finish Volatile Session Modestly Higher

(RTTNews) - Canadian stocks saw considerable volatility over the course of the trading session on Wednesday before eventually ending the day modestly higher.

After moving higher early in the session, the S&P/TSX Composite Index pulled back into negative territory before rebounding going into the close to end the day up 38.86 points or 0.2 percent at 24,106.79.

The uptick by the benchmark index partly reflected strength among energy stocks, with the S&P/TSX Capped Energy Index jumping by 2.0 percent.

The rally by energy stocks came as the price of crude oil surged partly due to the U.S. imposing new sanctions on Chinese importers of Iranian crude oil.

A spike the price of gold also contributed to substantial strength among gold stocks, driving the S&P/TSX Global Gold Index up by 1.9 percent.

Meanwhile, the strength in the energy and gold sectors was partly offset by weakness in the industrial and healthcare sectors.

The volatility on the day also came as chipmakers Nvidia (NVDA) and ASML (ASML) warned about the impact of President Donald Trump's new trade policies, contributing to a sell-off on Wall Street.

Traders were also digesting the Bank of Canada's widely expected decision to leave interest rates unchanged following a series of rate cuts over the past several months.

The Bank of Canada said it decided to maintain its target for the overnight rate at 2.75 percent, with the Bank Rate at 3 percent and the deposit rate at 2.70 percent.

The accompanying statement noted increased uncertainty due to the major shift in direction of U.S. trade policy and the unpredictability of tariffs makes it unusually challenging to project GDP growth and inflation in Canada and globally.

The Bank of Canada said its April Monetary Policy Report subsequently presents two scenarios that explore different paths for U.S. trade policy.

"In the first scenario, uncertainty is high but tariffs are limited in scope. Canadian growth weakens temporarily and inflation remains around the 2% target," the Bank of Canada said.

"In the second scenario, a protracted trade war causes Canada's economy to fall into recession this year and inflation rises temporarily above 3% next year," the Canadian central bank added, noting, "Many other trade policy scenarios are possible."

The Bank of Canada said its Governing Council will proceed carefully, with particular attention to the risks and uncertainties facing the Canadian economy.