Canada Stock Market Index (TSX) slipped 0.3%

Image Source : Krish Capital Pty Ltd

Index Update: The S&P/TSX Composite Index slipped 0.3% to close at 26,210 on Thursday, retreating from a record high set the previous session. The index underperformed its US counterparts due to its lower exposure to the technology sector.

Macro Update: A US federal court ruled that former President Trump exceeded his authority in imposing “reciprocal” tariffs and ordered them vacated. However, an appeals court reinstated the levies on Thursday, and the administration signaled it may ask the Supreme Court to pause the lower court's ruling. The Federal Reserve kept the funds rate at 4.25%–4.50% for a third consecutive meeting in May 2025, in line with expectations.

Top Movers and Losers: RBC shares dropped 3.3% after missing second-quarter earnings estimates, weighing on TD Bank and National Bank, which also traded lower. CIBC hovered in negative territory following its earnings report. Meanwhile, Shopify gained 0.3%, benefiting from a global tech boost sparked by Nvidia’s strong earnings. 

Our Stance: Despite this pullback, the index remains above its 21-period Simple Moving Average (SMA), indicating that the broader bullish trend remains intact. Currently, the index is testing a key support level around 25,900. Holding this level is critical for maintaining upward momentum. A successful defense of this support could pave the way for a renewed rally.  Conversely, a decisive break below could expose the index to support zone located between 25,600 and 25,400.

Commodity Update: The U.S. dollar weakened on Friday, marking its fifth consecutive monthly decline amid trade and fiscal uncertainty. Investors turned cautious ahead of a key inflation report. Gold slipped 0.56% to $3,323.65, silver declined 0.79% to $33.16, and copper edged down 0.16% to $9,557.35. Meanwhile, Brent crude rose 0.41% to $63.89 as markets reacted to shifting U.S. tariffs and a possible OPEC+ output increase.

Technical Update: The S&P/TSX Composite Index ended on Thursday at 26,210.56, posting a slight 0.28% decline, largely attributed to a 0.57% drop in the financial sector. Despite this pullback, the index remains above its 21-period Simple Moving Average (SMA), indicating that the broader bullish trend remains intact. The Relative Strength Index (RSI) stands at 69.72, suggesting the market is nearing overbought territory but still in a relatively neutral momentum zone. Currently, the index is testing a key support level around 25,900. Holding this level is critical for maintaining upward momentum. A successful defense of this support could pave the way for a renewed rally. Conversely, a decisive break below could expose the index to further declines, with the next major support zone located between 25,600 and 25,400.