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Canada’s main stock index rose to its highest closing level in five weeks on Tuesday, outperforming Wall Street, as higher commodity prices bolstered energy and gold mining shares. The S&P 500 U.S. benchmark ended nearly unchanged as investors awaited crucial inflation data and the unofficial kickoff of the first-quarter reporting season.

The S&P/TSX Composite Index ended 146.03 points, or 0.7%, higher at 20,421.85.

The Toronto market’s materials sector, which includes precious and base metals miners and fertilizer companies, gained 1.3% as gold and copper prices rose.

Multinational mining company Glencore proposed introducing a cash component to its US$22.5 billion bid for Teck Resources and urged its board to delay an impending vote on a restructuring. Shares of Teck Resources rose 0.9%.

Energy advanced 1.2% as oil settled 2.2% higher at US$81.53 a barrel, while heavily weighted financials were up 0.6%.

Health care was a laggard, falling 1.9%. It was weighed by a 9.4% decline in the shares of Tilray Brands after the cannabis producer said it would buy Hexo Corp for US$56 million. Shares of Hexo Corp plunged 27.8%, giving back Monday’s sharp rally.

U.S. stocks lost steam late in the session. The Dow closed in positive territory with economically sensitive sectors such as industrials, materials and transports providing a boost, while tech and tech-adjacent megacap stocks pulled the Nasdaq to a lower close.

“When you see cyclicals leading, that is saying that recession worries could be somewhat overblown,” said Ryan Detrick, chief market strategist at Carson Group in Omaha. “That’s a healthy sign, what you wouldn’t expect to see if we were headed straight for recession.”

Stocks briefly gained momentum in the afternoon as Chicago Fed President Austan Goolsbee urged caution, warning that the Federal Reserve needs to be careful about raising rates too aggressively in its efforts to tame inflation.

With a lack of market moving catalysts, investors looked ahead to Wednesday’s consumer price index (CPI) for any evidence that the long, slow inflation cooldown continues.

“It’s the calm before the storm,” Detrick added. “With huge inflation data tomorrow, Fed minutes coming out soon and earnings right around the corner, traders are taking a wait and see approach to see how the inflation data comes in.”

On a monthly basis, analysts see headline and core CPI cooling to 0.2% and 0.4%, respectively. But year-on-year, while consensus estimates call for a significant drop in the headline number - to 5.2% from 6.0% - the core measure, which strips out volatile food and energy prices, is expected to gain heat, rising to 5.6% from 5.5%.

As inflation slowly cools to the Fed’s average annual 2% target, market participants are banking on a 67% likelihood of another 25 basis point interest rate hike at the conclusion of its May monetary policy meeting, according to CME’s FedWatch tool.

“(The) 25 basis point hike is probably going to happen, and is baked into stock prices,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “How they position it for the next meeting is key, because so many people are expecting a downturn in the economy.”

Beyond CPI, investors are eyeing first-quarter reporting season, which surges from the starting gate on Friday with results from three major banks, Citigroup Inc, JPMorgan Chase & Co and Wells Fargo & Co.

Analysts expect aggregate first-quarter S&P 500 earnings falling 5.2% year-on-year, a stark reversal from the 1.4% annual growth seen at the beginning of the quarter.

The Dow Jones Industrial Average rose 98.27 points, or 0.29%, to 33,684.79; the S&P 500 lost 0.17 points, essentially flat, at 4,108.94; and the Nasdaq Composite dropped 52.48 points, or 0.43%, to 12,031.88.

Among the 11 major sectors of the S&P 500, communication services and tech ended in the red, while energy and financials enjoyed the largest percentage gains.

Cryptocurrency-related shares such as Coinbase Global Inc, Riot Platforms Inc and Marathon Digital Holdings Inc climbed between 6% and 17% as bitcoin broke through the US$30,000 level for the first time in 10 months.

CarMax Inc surged 9.6% after the used-car retailer posted a consensus-beating quarterly profit.

Drugmaker Moderna Inc slipped 3.1% after the company said its closely watched flu vaccine failed to meet the criteria for “early success” in a late-stage trial.

Advancing issues outnumbered decliners on the NYSE by a 3.04-to-1 ratio; on Nasdaq, a 1.49-to-1 ratio favored advancers. The S&P 500 posted nine new 52-week highs and no new lows; the Nasdaq Composite recorded 64 new highs and 118 new lows. Volume on U.S. exchanges was 9.84 billion shares, compared with the 11.95 billion average over the last 20 trading days.

Reuters, Globe staff

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