26.08.202513:43:55UTC+00TSX Recovers on Major Bank Earnings

The S&P/TSX Composite Index experienced a slight increase of 0.2%, surpassing the 28,200 level on Tuesday. This uptick was primarily driven by better-than-expected earnings reports from major banks and a lull in the market adjustment following the Jackson Hole event. Bank of Montreal (BMO) and Scotiabank saw significant gains, rising over 3% and 4.5%, respectively. These gains were attributed to higher quarterly profits fueled by net interest income and reduced provisioning, although both banks noted potential challenges such as weaker trading revenues, modest loan growth, and risk from exposure to exporters affected by U.S. trade policies. This reassessment of earnings came amid doubts about policy credibility after a controversial decision by the White House involving a Federal Reserve governor, which temporarily triggered a flight to safe assets and forced investors to reassess the timing and independence of the Fed's future monetary easing. However, the market rise was tempered by declines in Canadian Natural Resources and Suncor, each down over 1%, as investors shifted away from cyclical energy stocks. The market remained cautious ahead of several key economic indicators, including Nvidia's earnings report, the U.S. Personal Consumption Expenditures (PCE) inflation figures, and Canada’s Q2 GDP data.