US Stock Market at All-Time High, Canada Inflation Cooling Down

Wall Street is wrapping up the first quarter earnings season with one last key company yet to report: NVIDIA, the heart of the AI rally in 2024. Expectations are high, and the market anticipates another eye-catching performance from the tech giant. Both the Nasdaq and S&P 500 have reached all-time highs, advancing 11.4% and 12% year-to-date, respectively. Meanwhile, Canada’s main benchmark, the S&P/TSX, is up 7.2%.

The US Federal Reserve has reiterated that it needs several months of consistently lower inflation reports before considering lowering interest rates. Despite higher rates, the equity markets and the economy have shown unprecedented resilience, leaving the Fed in no rush to change its course as there are no significant cracks in the economy.

North of the border, the story is different. Canada’s inflation report for April came in at 2.7% year-over-year, the lowest in three years and down from 2.9% the previous month. This figure is approaching the Bank of Canada’s 2% target and could prompt the authority to start lowering rates this summer.

Canada is expected to lower rates three times by year-end as the economy shows signs of weakness and the housing market crisis persists. A majority of households are set to renew their mortgages, and unlike their southern neighbors, Canadians do not benefit from 30-year fixed mortgage rates.