Canadian Index Closed on a Higher Note

Index Update: Canadian stocks rallied on Wednesday as investor sentiment improved after the United States and Iran agreed to pause their mutual attacks for a two-week period and pursue talks aimed at establishing a framework to end hostilities. After opening above yesterday's close, today the benchmark S&P/TSX Composite Index traded firmly positive through the session before settling at 33,620.57, up by 383.05 points (or 1.15%).

Macro Update:  U.S. Trade Representative Jamieson Greer stated that he does not expect all the issues related to the new draft would be resolved by July 1, which is the deadline for the U.S. to notify Canada and Mexico on its plans. Canada has also been hit by Trump's tariffs on steel, aluminum, autos, and lumber industries, which do not fall under CUSMA. On the economic front, it was an uneventful day for Canada with no data release.

Top Movers:  Among the individual stocks, Aritzia Inc (9.52%), Gildan Activewear Inc (6.04%), Magna International Inc (5.50%), Hudbay Minerals Inc (8.23%), Lundin Mining Corp (7.90%), and 5N Plus Inc (7.30%) were the prominent gainers.

Our Stance: Momentum remains steady, with the 14-period Relative Strength Index (RSI) hovering around 60.99, suggesting further upside potential without entering overbought territory. However, the broader structure still indicates a phase of consolidation, with price action lacking a decisive breakout. Immediate support is seen near 33,400, and a sustained break below this level may weaken sentiment, potentially dragging the index toward the 33,000 zone in the near term.

Commodity Update:  The U.S. dollar remained under pressure on Thursday following broad weakness, as investors closely monitored whether the fragile two-week ceasefire between the United States and Iran would continue. Precious metals moved lower, with gold declining 0.79% to USD 4,740.10 and silver falling 1.98% to USD 73.91. Copper also slipped 0.47% to USD 12,634.00. Meanwhile, Brent crude oil climbed 2.57% to USD 97.10 amid continuing Strait of Hormuz disruptions and renewed Middle East tensions.

Technical Update: 

On Wednesday, the S&P/TSX Composite Index advanced 383.05 points, or 1.15%, to close at 33,620.57, signalling a return of buying interest after recent volatility. From a technical perspective, the index continues to trade above its 21-period Simple Moving Average (SMA), which is acting as a dynamic support and helping maintain a constructive near-term bias. Momentum remains steady, with the 14-period Relative Strength Index (RSI) hovering around 60.99, suggesting further upside potential without entering overbought territory. However, the broader structure still indicates a phase of consolidation, with price action lacking a decisive breakout. Immediate support is seen near 33,400, and a sustained break below this level may weaken sentiment, potentially dragging the index toward the 33,000 zone in the near term.