Canadian Stocks Clocked Marginally Lower

Image Source : Krish Capital Pty Ltd

Index Update: The S&P/TSX Composite Index finished marginally lower at the 26,259 level on Wednesday, retreating after briefly touching the 26,310 mark for the first time, as optimism was tempered by the release of the US Federal Reserve’s May meeting minutes.

Macro Update: Fed officials assessed that the announced tariff increases had been significantly larger and more extensive than anticipated and noted considerable uncertainty surrounding the direction of trade policy and the magnitude, scope, timing, and duration of its economic effects, minutes from the May FOMC meeting showed. 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: Shares of Bank of Montreal rose 1.9% after the bank exceeded earnings expectations for its second fiscal quarter. The National Bank of Canada also jumped 4%, driven by strong performance in its financial markets division. Meanwhile, shares of Suncor Energy and Canadian Natural dipped slightly amid a subdued session for oil producers.

Our Stance: From a technical standpoint, the index remains above its 21-period Simple Moving Average (SMA), supporting a continuation of the short-term uptrend. However, immediate support at 25,900 is crucial. Holding above this level could open the door for a potential rebound, while a break below 25,900 would increase the likelihood of further downside.

Commodity Update: U.S. federal court blocked President Trump’s proposed "Liberation Day" tariffs, ruling he exceeded his authority. The decision boosted the dollar against haven currencies. Gold dropped 0.94% to $3,291.30, while silver rose 0.25% to $33.34. Copper gained 0.40% to $9,604.95. Brent crude climbed 1.00% to $65.55, lifted by improved market sentiment following the court’s rejection of the broad import duties plan.

Technical Update: The S&P/TSX Composite Index rose by 14.45 points to close at 26,283.45, marking a 0.06% gain. This modest advance reflects strong investor confidence and increased trading activity. A key contributor to the day’s performance was the basic materials sector, which climbed 0.58% amid renewed optimism in commodity-related stocks. From a technical perspective, the index remains above its 21-period Simple Moving Average (SMA), supporting a continuation of the short-term uptrend. However, immediate support at 25,900 is crucial. Holding above this level could open the door for a potential rebound, while a break below 25,900 would increase the likelihood of further downside. In that case, key support levels to monitor are 25,600 and 25,400, which will be critical in determining whether this is a temporary pullback or the beginning of a more significant decline.