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Canada’s resource-heavy main stock index ended Monday’s trading session at a two-week high, led by gains in the materials and energy sectors in quiet end-of-summer trading.

Wall Street’s major indexes also closed higher as traders awaited a slew of economic data from Canada and the U.S. this week.

“Today TSX is outperforming a little bit on the back of financials and commodities and gold,” said Diana Avigdor, portfolio manager and head of trading at Barometer Capital Management. “It’s also the dog days of summer,” she said. “Markets are going to lurch up and down for the rest of the week ahead of a long weekend.”

investors were still digesting Friday’s comments from Fed Chair Jerome Powell that the U.S. central bank may need to raise interest rates further to ensure inflation is contained.

Focus now shifts to a report on the U.S. personal consumption expenditures price index, the Fed’s preferred inflation gauge, to be released on Thursday, and non-farm payrolls data due on Friday.

“The fact that Powell didn’t come out and say anything particularly hawkish or particularly unnerving to markets - that has proven to make this a bit of a risk-on day, even if he wasn’t outright dovish either,” said Ross Mayfield, Investment Strategy Analyst at Baird.

The Toronto Stock Exchange’s S&P/TSX composite index rose by 189.39 points, or 0.95%, to 20,025.14, hitting its highest since Aug. 15.

Energy was up 1.5% in Toronto, as oil prices held steady on Monday, pressured by worries further U.S. interest rate hikes could dent demand but supported by a potential supply disruption from a tropical storm off the U.S. Gulf Coast.

China reduced a 0.1% stamp duty on stock trading effective Monday in the latest attempt to boost the struggling market as a recovery sputters in the world’s second-biggest economy.

The materials sector, which includes precious and base metals miners and fertilizer companies and is sensitive to the Chinese economy, gained 2.1%.

The heavily weighted financials sector gained 1.1% as major Canadian banks are set to continue to report earnings this week.

“Financials in Canada have really gotten sold down and they’re trading at valuations that are very attractive,” said Avigdor. “They’re below their long-term average valuation. The banks long-term will do OK. They’re very highly correlated with the economy.”

Canada’s second-quarter GDP report on Friday is likely to show a sharp slowdown in economic growth, a Reuters poll of economists found, which could lead the Bank of Canada to pause interest rate hikes.

The S&P 500 climbed 0.63% to end the session at 4,433.31 points.

The Nasdaq gained 0.84% to 13,705.13 points, while Dow Jones Industrial Average rose 0.62% to 34,559.98 points.

Nvidia rose 1.78% and was the most traded stock in the S&P 500, with US$31 billion worth of the chipmaker’s shares exchanged.

Other megacaps also gained, with Apple and Alphabet both adding 0.9%.

3M jumped 5.2% after a report that the conglomerate has tentatively agreed to pay more than US$5.5 billion to resolve over 300,000 lawsuits claiming it sold the U.S. military defective combat earplugs.

Goldman Sachs gained 1.8% after the lender struck a deal to sell an investment advisory business to wealth management firm Creative Planning LLC.

U.S.-listed shares of Chinese companies including JD.com, Baidu and Alibaba rallied over 2% after China halved the stamp duty on stock trading.

U.S. Commerce Secretary Gina Raimondo discussed concerns about restrictions on American businesses including Intel and Micron with Chinese Commerce Minister Wang Wentao. Micron’s stock rose 2.5% and Intel added 1.1%.

The U.S. Federal Trade Commission suspended its challenge of Amgen’s $27.8 billion purchase of Horizon Therapeutics . Horizon’s shares 5.2%.

Advancing issues outnumbered falling ones within the S&P 500 by a 5.5-to-one ratio. The S&P 500 posted 10 new highs and 2 new lows; the Nasdaq recorded 54 new highs and 162 new lows. Volume on U.S. exchanges was relatively light, with 8.1 billion shares traded, compared to an average of 10.8 billion shares over the previous 20 sessions.

Reuters, Globe staff

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