Canadian and U.S. stock markets gained on Wednesday as hopes continued to build for an end to the war in the Middle East.
However, some of the signals investors saw as hopeful are already under dispute, and several earlier bouts of optimism in financial markets were quickly undercut by continued, fierce fighting in the region.
Allan Small, senior investment adviser at iA Private Wealth, said he thinks some of the gains on Wednesday were a spillover from the previous day, adding that markets are likely to remain volatile.
“There were issues with certain parts of the market prior to the war breaking out, like the software stocks due to AI disruption, the private equity firms, the high debt levels that people were nervous about because companies were borrowing money to spend more money on AI (and) things like that,” he said.
The S&P/TSX composite index was up 189.91 points at 32,957.95.
In New York, the Dow Jones industrial average was up 224.23 points at 46,565.74. The S&P 500 index was up 46.80 points at 6,575.32, while the Nasdaq composite was up 250.32 points at 21,840.95.
Oil prices also fell back toward US$100 per barrel after U.S. President Donald Trump said late Tuesday that the U.S. military could end its offensive in two to three weeks.
The May crude oil contract was down US$1.26 at US$100.12 per barrel.
That added to optimism following a couple tenuous signals of hope from earlier Tuesday that Wall Street latched onto, including a news report quoting Iran’s president as saying that it has “the necessary will to end the war” as long as certain requirements are met, including “guarantees to prevent a recurrence of aggression.”
Shortly before Wall Street began trading on Wednesday, Trump claimed in a post on his social media network that Iran “has just asked the United States of America for a CEASEFIRE!”
“We will consider when Hormuz Strait is open, free, and clear. Until then, we are blasting Iran into oblivion or, as they say, back to the Stone Ages!!!”
But Iran’s foreign ministry spokesman, Esmail Baghaei, quickly called that claim “false and baseless,” according to a report on Iranian state television.
Big Tech powered the move higher. Gains of 3.4% for Alphabet and 0.8% for Nvidia were two of the strongest forces lifting the S&P 500.
“It seems as though a lot of the rally is being led by technology again, buying back some of the tech names that have been sold,” Small said.
On the Canadian stock market, most sectors were positive, with basic materials leading the gains.
Small said the sector benefited from increases in the price of precious metals. The June gold contract was up US$134.50 at US$4,813.10 an ounce.
Energy names moved lower alongside oil prices. Canadian Natural Resources Ltd. lost 4.8% on the day, while Suncor Energy Inc. fell 1.9%.
The Canadian dollar traded for 72.00 cents US compared with 71.74 cents US on Tuesday.
— With files from The Associated Press