Canadian stocks moved higher during trading on Wednesday

Image Source : Krish Capital Pty Ltd

Index Update:  The S&P/TSX Composite Index rose 0.30% to close at 25,692.45 on Wednesday, marking its seventh consecutive gain. This positive close was primarily driven by the decent performance of technology and railway sector giants, which successfully counteracted the negative impact of losses experienced in the mining sector. Easing global trade tensions and softer US inflation boosted sentiment as investors awaited further international trade agreement news.

Macro Update:  Prime Minister Carney's Liberal government will implement a middle-income tax cut before July 1 to boost affordability and economic growth. However, the government will not present a full annual budget this year, opting instead for an economic update in the fall. US inflation continues trending toward the Fed's 2% goal, as evidenced by April's softer-than-anticipated CPI. Vice Chair, Jefferson has identified new import tariffs as a material downside risk. These tariffs could disrupt the current disinflationary trajectory, potentially inducing a temporary inflationary surge, thereby complicating the Fed's monetary policy objectives.

Top Movers and Losers:  The biggest gainers of the session on the S&P/TSX Composite were Finning International Inc. (TSX: FTT), which rose 6.62%. Canadian Pacific Kansas City Limited (TSX: CP) added 3.82% and Shopify Inc (TSX: SHOP) was up 3.81%. Biggest losers included Aya Gold & Silver Inc (TSX: AYA), which fell 7.30%. Baytex Energy Corp (TSX: BTE) declined 5.58% and CAE Inc. (TSX: CAE) down 5.00%.

Our Stance:  The Index remains in a solid uptrend, trading above its 21-period Simple Moving Average (SMA). The Relative Strength Index (RSI) stands at 67.77, indicating strong market momentum while still below overbought territory leaving room for further upside. The index is currently testing a key support level around 25,400. Holding this level is essential to sustaining bullish momentum.

Commodity Update:  The dollar wavered Thursday amid trade uncertainty, following initial optimism over a U.S.-China tariff truce. South Korea’s won stabilized after recent volatility. Gold fell 0.90% to $3,160.05, silver dropped 1.08% to $32.09, and copper edged down 0.42% to $9,554.75. Brent crude slid 1.60% to $65.04 after Iran showed openness to a U.S. nuclear deal and U.S. crude inventories unexpectedly rose, stoking oversupply concerns.

Technical Update:  On Wednesday, the S&P/TSX Composite Index gained 75.59 points, or 0.30%, to close at 25,692.45. The technology sector led the advance with a 1.60% gain, fueled by renewed optimism surrounding tech stocks. Technically, the index remains in a solid uptrend, trading above its 21-period Simple Moving Average (SMA). The Relative Strength Index (RSI) stands at 67.77, indicating strong market momentum while still below overbought territory leaving room for further upside. The index is currently testing a key support level around 25,400. Holding this level is essential to sustaining bullish momentum. A breakdown below it could trigger a pullback, with the next major support area on the weekly chart lying between 25,200 and 24,900. To extend its upward trajectory, the index must remain above these critical levels.