Bay Street Likely To Open On Muted Note; BoC, Fed Announcements In Focus

(RTTNews) - The Bank of Canada's interest rate decision and the Federal Reserve's rate call and the central bank's accompanying statement are set to make a significant impact on Bay Street on Wednesday.

Earnings updates from big name U.S. companies Meta, Microsoft and Tesla are also likely to provide some direction.

The start may be somewhat muted with commodities a bit subdued, and European stocks trading broadly higher.

The Canadian central bank is widely expected to cut its key policy rate by 25 basis points. The bank's updated Monetary Policy Report is also due this morning.

The BoC cut its key interest rate by 50 basis points for a second consecutive decision in its December meeting, marking cumulative rate cuts to the tune of 175 bps from this cycle's peak of 5%.

In company news, CGI Inc. (GIB.TO) announced that it has signed an agreement to acquire BJSS, a UK-based technology and engineering consultancy known for its innovative IT solutions, software engineering expertise and delivery excellence. The transaction is expected to close in February 2025 .

Canadian Pacific Kansas City (CP.TO) announced that it has reached a tentative four-year collective agreement with the Teamsters Canada Rail Conference Maintenance of Way Employees Division representing engineering service employees in Canada.

The Canadian market closed higher on Tuesday, recovering well after snapping a nine-day winning streak on Monday, thanks to strong buying in the technology sector.

The benchmark S&P/TSX Composite Index closed up 130.30 points or 0.52% at 25,419.45, after scaling a low of 25,277.05 and a high of 25,425.86 intraday.

Asian stocks rose in thin trade on Wednesday, with markets in the region including China, Hong Kong, Singapore and South Korea closed for Lunar New Year holidays.

Technology stocks rebounded as investor angst ebbed over the emergence of a low-cost Chinese AI model.

Market attention turned to U.S. mega-cap tech company earnings including Facebook owner Meta Platforms, Microsoft and Tesla, as well as the Federal Reserve's first interest-rate decision in 2025 due later in the day.

European stocks are broadly higher with investors reacting to quarterly earnings updates and looking ahead to the Federal Reserve's monetary policy announcement.

The European Central Bank's monetary policy announcement is due on Thursday. The ECB is widely expected to lower interest rate by 25 basis points.

In commodities, West Texas Intermediate Crude oil futures are down $0.32 or 0.43% at $73.45 a barrel.

Gold futures are down marginally at $2,767.10 an ounce, while Silver futures are gaining $0.113 or 0.37% at $30.995 an ounce.