Canadian stocks dropped during trading on Wednesday

Image Source : Krish Capital Pty Ltd

Index Update: The S&P/TSX Composite Index dropped 0.83% to close at 25,839.17 on Wednesday. The downturn was largely attributed to prevailing U.S. trade and fiscal uncertainties and mixed domestic economic signals. Stalemate in Congress over President Trump’s tax proposals, alongside stalled progress in key trade talks, particularly weighed on export-oriented industries.

Macro Update: In Canada, concerns about the real estate market resurfaced as April's new housing price index fell 0.4%, ending a two-month stable trend. Major banks set aside over CAD 1 billion in loan loss provisions amid growing household debt. Meanwhile, core inflation rose to 2.9%, lowering the chances of a June interest rate cut to around 35%. In May 2025, Canada’s CFIB long-term business outlook rose to 40.0, a three-month high but still below the 50-point optimism mark. Trade-related uncertainty and tariffs continued to weigh on international businesses. Hiring plans remained weak, and the short-term outlook also improved slightly to 42.4.

Top Movers and Losers: The biggest gainers of the session on the S&P/TSX Composite were Ngex Minerals Ltd (TSX: NGEX), which rose 15.74%. Orla Mining Ltd (TSX: OLA) added 6.77% and G Mining Ventures Corp (TSX: GMIN) was up 5.97%. Biggest losers included ATS Corporation (TSX: ATS), which fell 6.12%. Colliers International Group Inc Bats (TSX: CIGI) declined 5.39% and Premium Brands Holdings Corporation (TSX: PBH) down 5.30%.

Our Stance: The index remains well above its 21-period Simple Moving Average (SMA), indicating that the short-term uptrend is still intact. However, the Relative Strength Index (RSI) climbed to 65.72, nearing overbought territory. This elevated reading suggests a possible loss of momentum, and traders should remain vigilant for early signs of a trend reversal.

Commodity Update: The dollar fell to a two-week low against the yen on Thursday amid U.S. fiscal concerns and weak Treasury bond auction results. President Trump’s efforts to advance his tax and spending bills increased market unease. Gold rose 0.95% to $3,344.80, silver gained 0.43% to $33.77, and copper edged up 0.31% to $9,555.50. Brent crude slipped 0.50% to $64.61 due to rising U.S. stockpiles and Iran deal uncertainty.

Technical Update: On Wednesday, the S&P/TSX Composite Index closed at 25,839.17, down 0.83% on the day, as a weakness in the healthcare sector, which dropped 2.94%, weighed heavily on overall market sentiment. Despite the pullback, the index remains well above its 21-period Simple Moving Average (SMA), indicating that the short-term uptrend is still intact. However, the Relative Strength Index (RSI) climbed to 65.72, nearing overbought territory. This elevated reading suggests a possible loss of momentum, and traders should remain vigilant for early signs of a trend reversal. Key technical levels are now in sharp focus. The immediate support sits at 25,500—a level that, if held, could offer a platform for a renewed rally. Conversely, a sustained move below this threshold may trigger a deeper pullback, with additional support zones seen at 25,200 and 25,000.