Tech Rally Propels Global Markets Higher Amid Lower Oil Prices

Global equities surged yesterday, driven by a tech-fueled rally that pushed the Nasdaq to a record close. Lower oil prices provided additional support, even as longer-dated Treasury yields remained near multidecade highs. Wall Street futures and TSX futures reflected this positive sentiment, following the broader market's upward trend.

Analyst Kyle Rodda of Capital.com attributed the rally to easing interest rate uncertainty and reduced geopolitical risks, which allowed investors to focus on strong earnings from AI-driven companies. Key earnings reports from Constellation Brands Inc., RPM International Inc., and Lamb Weston Holdings Inc. are also in focus.

In Europe, the pan-European STOXX 600 rose 1%, with Britain’s FTSE 100, Germany’s DAX, and France’s CAC 40 all posting gains. Asian markets also showed strength, with Japan’s Nikkei closing 1.05% higher and Hong Kong’s Hang Seng climbing 1%.

Oil prices eased slightly due to resilient Middle Eastern crude exports and a G7 emergency stockpile release, though security risks in the region capped further declines. Brent crude futures fell 0.93% to US$99.39 a barrel, while West Texas Intermediate (WTI) crude futures dropped 1.49% to US$88.10. Analyst Priyanka Sachdeva noted that while crude exports have exceeded prewar levels, supply normalization remains uncertain due to recent attacks on tankers.

Spot gold slipped 0.3% to US$4,127.87 an ounce, while U.S. gold futures were little changed. The Canadian dollar weakened against the U.S. dollar, trading at 69.99 to 70.20 US cents in early trading. The U.S. dollar index slid 0.12% to 102.04, with the euro and British pound gaining against the greenback. In bonds, the yield on the U.S. 10-year note fell to 5.280%.

Today’s economic highlights include Euro zone retail sales for August, the U.S. trade balance for August, and Canada’s international merchandise trade for August, along with Canada’s Ivey PMI for September.