12:09 PM EDT, 05/07/2025 (MT Newswires) -- The Toronto Stock Exchange is up 152 points at midday with utilities and technologies leading gains.

Limiting upside are declines in miners (-1.6%) and energy (-0.8%).

Oil traded higher for a second day early on Wednesday, rebounding from the four-year low that was touched Monday as China and the United States agreed to stage trade talks while a report showed U.S. inventories fell last week. Gold prices fell early on Wednesday as the dollar rose and safe-haven demand slowed after the United States and China agreed to hold trade talks.

BMO Economics also noted that while the world waits for U.S.-China trade negotiations to begin, market attention will turn to the Fed today at 2pm ET.

BMO's Michael Gregory said: "The FOMC is expected to keep policy rates unchanged, with the target range for the fed funds rate at 4.25%-to-4.50%, for the third consecutive meeting. As before, the Fed is biding its time until the Administration's policy picture is clearer. Powell said [at the prior meeting]: 'We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension.' The tension should be short-lived, lasting until second round pressures are proved absent in the month-to-month inflation readings. Then, the Fed's focus should shift definitively to growth, which is when rate cuts should resume (we reckon before summer's end)."

According to Rosenberg Research, the "risk-on trade is showing a pulse again", on two events: the fact that senior trade officials in both the U.S. and China are now set to start official trade talks. "Again," the research said, "this is very much a case of much ado about nothing because keen students of this topic know that there is no quick fix to this elongated battle of cultures". The second boost came from the twin policy easing from the PBOC, which trimmed benchmark rates and eased reserve requirement ratios. In sum, a nearly +$140 billion liquidity boost.

Rosenberg Research said the absence of major negative headlines relative to the beginning of April will likely see stocks continue to drift higher. "That is, until the negative impact from tariffs starts to show up in the hard data (something to look out for in the coming months)." But, the research added, with valuations expanding back towards a 21 times forward P/E ratio, it's hard to envision just how much further upside there really is at these levels -- especially as corporate America reminds investors of the economic reality (Ford, Mattel, Kellogg, and Clorox are all recent examples of companies cutting their outlooks, or pulling them entirely).

In the same note, Rosenberg Research said the Bank of Canada may have skipped the last meeting in terms of a change to the benchmark interest rates, but added the "job is not done". For Rosenberg Research, there are at least 75 basis points of rate cuts to go still, given all BoC easing cycles end with the policy rate at, or below, 2%. That means probably -75 to -100 basis points of downside potential for the 2-year GoC yield and a -7% downside risk to the Canadian dollar to get back to where it should be, back at the February levels of around C$1.48.