TSX climbs on materials, financials boost; Powell speech in focus

By Purvi Agarwal

(Reuters) - Canada's main stock index climbed on Wednesday, boosted by materials and financial stocks, while investors awaited more clues on the interest rate cut trajectory of the Federal Reserve for the year.

At 10:02 a.m. ET (14:02 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 85.1 points, or 0.39%, at 22,160.2.

Materials-linked shares rose 0.9% as copper prices hit a two-week high, while gold prices took a breather after hitting a fresh record high. [GOL/] [MET/L]

Energy shares rose 0.5% and were set to extend their rally to a fifth session on gaining oil prices, as investors mulled supply risks stemming from global geopolitical conflicts, while OPEC+ ministers held current output cuts in a meeting. [O/R]

Heavy-weight financials also rose 0.7%, while healthcare shares gained 0.6%.

The benchmark Canadian index had pulled back from a series of record closing highs in the previous session, as uncertainty around the Federal Reserve's interest rate cut trajectory clouded investor sentiment.

"The markets and the Fed are pricing in three cuts, but now we're starting to hear some Fed governors talking about just one or two. If we get close to June, and inflation doesn't get closer to target, we could be down to two cuts for the rest of the year", said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth.

In the U.S., private payrolls increased more than expected in March, while a separate reading showed U.S. services industry growth slowed in March.

Investor focus will now shift to Fed Chair Jerome Powell's speech in the San Francisco Bay area at 12:10 p.m. ET on Wednesday.

"Powell said last time that three rate cuts are still on the table. He may say something different today and it could be market moving", Small said.

In Canadian corporate news, shares of professional services firm WSP Global fell 4.7% after short-seller Spruce Point Capital Management shorted the company.

Lightspeed Commerce shares gained 4.9% after the payments company announced 280 job cuts, looking to turn profitable.

(This story has been corrected to fix the number of job cuts at Lightspeed Commerce to 280, not 2,800, in paragraph 12)

(Reporting by Purvi Agarwal in Bengaluru; Editing by Ravi Prakash Kumar)