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Canada’s main stock index closed at a 22-month closing high on Thursday, buoyed by gains in technology and healthcare stocks, tracking a record close on the Wall Street after chip designer Nvidia’s strong quarterly results and forecast.

The Toronto Stock Exchange’s S&P/TSX composite index added 145.70 points, or 0.69%, at 21,318.08, its highest close since April 15, 2022.

Information technology stocks led gains on the index with a 1.2% rise. Electronic company Celestica jumped 12%, the highest among the tech stocks.

The S&P 500 and Dow Jones Industrial Average both surged to close at record highs on Thursday, powered by investors piling into growth and technology stocks the day after artificial intelligence poster child Nvidia’s bumper earnings and outlook.

“The epicentre of today’s rally is the IT sector, as evidenced by the performance of the megacap tech-heavy NASDAQ 100 index. Nvidia’s bullish announcement has ignited a major rally in equity markets worldwide,” said Brandon Michael, senior investment analyst at ABC Funds.

The company’s earnings were a major test for the AI-fueled rally on Wall Street that first pushed the S&P 500 above the 5,000 point mark earlier this month. Some analysts had cautioned that disappointing results could spark a steep selloff among technology stocks.

Instead, the S&P 500 ended at a record high, as did the Dow Jones Industrials, which closed above 39,000 for the first time.

Unofficial closing data showed the Dow Jones Industrial Average rose 456.54 points, or 1.18%, to 39,068.78, the S&P 500 gained 105.14 points, or 2.11%, to 5,086.94 and the Nasdaq Composite added 460.75 points, or 2.96%, to 16,041.62.

“As Nvidia goes, so goes the world,” joked Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers Solutions.

He noted how Nvidia’s earnings performance trounced high market expectations, showing doubters that plenty of juice was left in the AI trade after the recent rally.

“When do you sell - maybe you don’t. Maybe there’s still room, and I’m happy to sit and ride it out,” Janasiewicz added.

Nvidia additions to its market capitalization on Thursday beat Meta Platform’s $196 billion surge earlier this month as the biggest one-day gain by any company in Wall Street history.

The benchmark index will finish this year above the 5,000 mark, according to strategists in a Reuters poll.

Most of the 11 major S&P 500 sectors rose, with technology stocks leading gains.

The S&P 500 growth index advanced by its biggest daily percentage gain since November 2022.

Shares of other companies, seen as beneficiaries of the AI boost, also got a shot in the arm. Nvidia’s rival Advanced Micro Devices, server component supplier Super Micro Computer and Arm Holdings jumped.

Synopsys soared after the software maker for chip designers after reporting estimate-beating earnings and outlook.

The Philadelphia Semiconductor index also jumped, as did Big Tech and growth stocks such as Alphabet, Microsoft and Meta Platforms.

Meanwhile, investors’ bets are tilted towards June as the starting point for the first rate cut from the Federal Reserve.

Fed Vice Chair Philip Jefferson said on Thursday he would be looking at the totality of incoming economic data in assessing the time for the U.S. central bank to begin cutting its benchmark policy rate.

Data showed the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting a tight labor market.

Elsewhere, vaccine maker Moderna jumped after surprising investors with a fourth-quarter profit. The stock’s technicals also pointed to a bullish outlook.

However, Rivian and Lucid tumbled, after the electric vehicle startups forecast 2024 production well below analyst estimates on slowdown in demand.

Back on the TSX, healthcare companies also rose 2.4%, helped by Bausch Health’s 7.4% gain after quarterly revenue beat.

First Quantum Minerals climbed 5% after the company announced a range of measures late Wednesday to strengthen its balance sheet.

Enerplus jumped 8.5% after U.S. energy firm Chord Energy agreed to acquire the Canadian company to create a Williston basin-focused entity with an enterprise value of $11 billion.

Quebecor fell 2.4% after reporting its fourth quarter results.

Reuters

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