Markets edge higher ahead of interest rate decisions from BoC and Fed

TORONTO – Stock markets in Canada and the U.S. gained ground on Tuesday, as investors await interest rate decisions from the Bank of Canada and the U.S. Federal Reserve on Wednesday.

“Markets, they’re up modestly, but it’s more of a wait-and-see approach on what may come out of the two central banks,” said Anish Chopra, managing director with Portfolio Management Corp.

The Bank of Canada’s key lending rate stands at 2.25 per cent after a hold in January, but the economic landscape has shifted since that decision. A Reuters poll shows economists widely expect the bank to maintain its current policy rate.

For the Fed’s decision, traders see virtually no chance of a cut, according to data from CME Group. Cuts to interest rates by the Fed would give the economy and job market a boost, and U.S. President Donald Trump has angrily been calling for them. But reductions would also worsen inflation.

“I think the markets or investors are expecting no change in rates, both in Canada and in the United States tomorrow, but it’s really the commentary that accompanies that and any comments made at the press conferences by the central bankers on what they see happening,” Chopra said. 

The S&P/TSX composite index was up 52.44 points at 32,929.09.  

In New York, the Dow Jones industrial average was up 46.85 points at 46,993.26. The S&P 500 index was up 16.71 points at 6,716.09, while the Nasdaq composite was up 105.35 points at 22,479.53.  

Gains in equity markets came even as the war in the Middle East continued to drive oil prices higher. The May crude oil contract was up US$3.07 at US$95.53 per barrel.

It’s a break, for now at least, from the usual playbook since the start of the conflict, where stock prices have tended to go in the opposite direction of oil prices. The fear in financial markets has been that a long-term disruption to the global flow of oil could send prices so high for so long that it damages the global economy. 

Not only would higher gasoline prices sap households’ budgets, it could also push companies to pass on their own higher transportation costs to customers.

“When you’re looking at the commodity action on oil, it’s really news flow driven based on what’s happening in the Middle East, plus what’s happening specifically in the Strait of Hormuz and whether ships are able to make it through,” Chopra said. 

The U.S. stock market has a track record of bouncing back relatively quickly from military conflicts in the Middle East and elsewhere, as long as oil prices don’t stay too high for too long. Many professional investors are expecting that to be the case again, which has helped keep U.S. stock prices near their record levels.

The Canadian dollar traded for 73.00 cents US compared with 73.13 cents US on Monday.

The April gold contract was up US$6.00 at US$5,008.20 an ounce.

This report by The Canadian Press was first published March 17, 2026.

— With files from The Associated Press

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)