North American stock markets climbed Tuesday as the U.S. Federal Reserve kicked off a two-day meeting on interest rates.
In Toronto, the S&P/TSX composite index rallied 97.57 points at 15,385.27, pushed higher by gains in energy, gold and utilities stocks.
In New York, markets closed at record levels as the Dow Jones industrial average advanced 114.78 points at 19,911.21, moving up for the seventh session in a row.
The S&P 500 rose 14.76 points to 2,271.72, while the Nasdaq composite added 51.29 points at 5,463.83, lifted by tech stocks such as Apple Inc.
Some analysts predict that the bump in technology companies, a sector which didn’t fare as well as others during the post-U.S. election rally, may be the result of investors looking forward to tax changes that will bring more cash back from overseas.
The money is anticipated to be either invested in the businesses or returned to shareholders.
In economic news, it’s highly anticipated that the Fed will announce a rate increase on Wednesday at the conclusion of its meeting.
The last time the central bank raised interest rates was a year ago in December, when it hiked them to a range of 0.25% to 0.5%, where it has been all year.
Interest rates have been near zero since the 2008 financial crisis and have helped buoy financial markets.
Market watchers will be particularly interested in what Fed chairwoman Janet Yellen will say following the decision, including whether she will give any hints on the future schedule of rate hikes for 2017 and the bank’s thoughts on the election of U.S. president-elect Donald Trump.
Laura Lau, a senior portfolio manager at Brompton Group, said markets are forecasting one or two rate hikes in the new year, depending on U.S. economic performance.
“The data has certainly improved in the last month or two,” she said. “It’s not a gangbusters’ economy but it is still a slow growth economy.”
Lau noted that the slow pace of hikes may also be attributed to the uncertainty around the Trump administration and how new policies may impact the economy. Trump has also stated in the past that he thinks the Fed wields too much power.
The Canadian dollar was unchanged at US76.14¢ as the January crude contract added US15¢ to settle at its highest point this year at US$52.98 per barrel.
The February gold contract fell $6.80 to US$1,159 an ounce, January natural gas was down US3¢ to US$3.47 per mmBTU, and March copper contracts dropped US2¢ at US$2.60 a pound.
With files from The Associated Press