The stock markets are on a roll! Fresh earnings and solid fundamentals have investors buzzing. Canada's main index soared over 100 points on Thursday, with the industrials sector leading the charge. But here's where it gets controversial... the Canadian market's performance is heavily influenced by the basic materials sector, but experts like Mona Mahajan, Head of Investment Strategy at Edward Jones, believe other sectors could soon join the party.
Mahajan highlights the potential for growth in areas like real estate, driven by stable interest rates and a consumer base benefiting from lower mortgage rates and controlled inflation. She also predicts increased activity in the industrials sector, citing a potential re-acceleration in manufacturing.
And this is the part most people miss... Canada is diversifying its global trade partnerships. Prime Minister Mark Carney's recent visit to Beijing signals a new era of relations with China, reducing Canada's reliance on the U.S. and USMCA. Mahajan believes this is a sensible move, opening up new negotiation opportunities.
The S&P/TSX composite index closed at 33,028.92, up 112.45 points. Meanwhile, in New York, the Dow Jones industrial average soared to 49,442.44, with the S&P 500 and Nasdaq composite also posting gains.
Wall Street witnessed a stabilization, with stocks in the artificial intelligence industry rebounding after an encouraging report from a leading Taiwanese chip manufacturer. Mahajan notes that tech stocks, comprising 28% of the S&P 500, significantly impact the overall index performance.
Nvidia and other tech giants played a crucial role in lifting the market, following TSMC's stronger-than-expected profit report for the latest quarter. TSMC's plans to boost equipment investment to US$56 billion this year to capitalize on the AI boom further fueled the frenzy.
However, the rapid rise of AI-related stocks has sparked criticism, with some arguing their prices have soared too high. Nvidia, one of the heaviest weights on the S&P 500 on Wednesday, sank 1.4% but rebounded 2.1% after TSMC's CFO, Wendell Huang, signaled continued strong demand.
TSMC's crucial role as a major supplier to Nvidia and other giants, as well as a key customer for ASML and other providers, cannot be overstated. TSMC's U.S.-traded stock rose 4.4%, while ASML's U.S.-listed stock rallied 5.4%.
The earnings reporting season for big U.S. companies continues to gain momentum, with several major financial institutions releasing their results for the last quarter of 2025. BlackRock, now managing over US$14 trillion in investments, rose 5.9% after reporting stronger profit and revenue than expected. Morgan Stanley and Goldman Sachs also posted solid results, with their stocks climbing 5.8% and 4.6%, respectively.
Mahajan notes that financial companies have reported solid earnings, with good loan growth and trading revenues. She adds that those with investment banking arms are experiencing a boost as well.
The Canadian dollar traded at 71.95 cents US, compared to 72.06 cents US on Wednesday. The March crude oil contract closed at US$59.08 per barrel, down US$2.80, while the February gold contract settled at US$4,623.70 an ounce, down US$12.00.
This report was first published by The Canadian Press on January 15, 2026, with additional information from The Associated Press.
