Most major stock indexes in Canada and the U.S. saw gains Thursday as investors digested data on the U.S. economy and a gain in oil prices.
Hadiza Djataou, vice-president and portfolio manager of global bonds at Mackenzie Investments, said that equity markets benefited from positive U.S. economic data as yields ticked higher in the bond market.
She said that the data provided somewhat of a relief that the U.S. labour market “is not really cracking to the extent that the market was expecting.”
Figures from the U.S. Labor Department showed that filings for jobless benefits rose in the last week of 2025 but remain historically low, despite signs that the U.S. labour market is weakening.
The number of Americans filing for jobless claims for the week ending Jan. 3 rose by 8,000 to 208,000, up from 200,000 the previous week. Applications for unemployment aid are viewed as a proxy for layoffs and are close to a real-time indicator of the health of the U.S. job market.
“It means that the U.S. growth and the U.S. economy are doing OK, and there’s no reason for risk to be challenged,” Djataou said.
In the bond market, the yield on the 10-year Treasury rose to 4.18% from 4.15% late Wednesday.
On Wall Street, defence companies led the market after U.S. President Donald Trump said he wants to increase U.S. military spending to US$1.5 trillion in 2027 from US$901 billion in order to build the “Dream Military.”
L3Harris Technologies jumped 5.2%, Lockheed Martin climbed 4.3% and Northrop Grumman added 2.4%. They bounced back from losses the prior day, when Trump complained defence contractors were making military equipment too slowly.
“Defence shares are going to continue to be supported in an environment where Trump obviously has decided to be somewhat geopolitically more active,” Djataou said.
Nvidia was the heaviest weight on the S&P 500 after dropping 2.2%, giving back some of its big gain of nearly 40% last year.
“When you reach extreme valuations, people typically tend to take chips off the table. I think there’s a bit of that, and there’s also a bit of uncertainty in how much AI is actually going to deliver,” Djataou said.
In New York, the Dow Jones industrial average was up 270.03 points at 49,266.11. The S&P 500 index was up 0.53 points at 6,921.46, while the Nasdaq composite was down 104.26 points at 23,480.02.
The S&P/TSX composite index was up 243.15 points at 32,378.64.
She noted that Canadian stock markets benefited from tailwinds in the energy market as the price of oil ticked higher.
“If you remember the announcement of the incursion in Venezuela, oil prices barely moved over the weekend and also on Monday. That seems to be playing catch-up now, but I don’t think this is necessarily something that is cyclically going to continue to be maintained.”
Oil prices jumped to continue their zigzags since Trump ousted the leader of Venezuela last weekend. The February crude oil contract was up US$1.77 at US$57.76 per barrel.
Venezuela is potentially sitting on more oil than any other country in the world, and any increase in production could push further downward on prices, which have already fallen on expectations for plentiful supplies. But billions of dollars of investment are likely necessary to get Venezuela’s aging infrastructure in good-enough shape to ramp up production sharply.
The Canadian dollar traded for 72.12 cents US compared with 72.34 cents US on Wednesday.
The February gold contract was down US$1.80 at US$4,460.70 an ounce.
— With files from The Associated Press