Canadian Stocks Advance as Supply Concerns Ease

Index Update:

Rebounding from yesterday's losses, Canadian stocks climbed on Friday as market participants welcomed Iran's reopening of the Strait of Hormuz which cooled the tensions related to crude oil supply disruption ahead of the second round of U.S.-Iran peace talks.

After opening above yesterday's close, today the benchmark S&P/TSX Composite Index traded firmly positive throughout the session before settling at 34,346.29, up by 294.06 points (or 0.86%).

Macro Update:

Data from the Canadian Federation of Independent Business revealed its barometer long-term index rose to 58.5 in April, following a downwardly revised sharp fall of 55.7 in March.

The short-term optimism index also recorded a modest gain, increasing by about 1 point to 55.4.

Data from the Canada Mortgage and Housing Corporation revealed that housing starts fell by 6.00% from the previous month to 235,900 in March.

On the political front, the Minister for Canada-U.S. Trade relations Dominic LeBlanc assured that his team will not be the cause for any delay in finding a resolution with the U.S. in the ongoing negotiations for renewing the Canada-United States-Mexico Agreement.

Recently, U.S. Trade Representative Jamieson Greer had stated that the issues surrounding the U.S.-Canada trade over the renewal of CUSMA pact may not be resolved by July 1, raising concerns of a seamless agreement.

Top Movers:

Among the individual stocks, Perpetua Resources Corp (7.21%), Magna International Inc (6.76%), Aritzia Inc (5.25%), Brp Inc (5.22%), Avino Silver and Gold Mines Ltd (7.93%), and Novagold Res Inc (7.85%) were the prominent gainers.

Our Stance:

Momentum remains firm, with the 14-period RSI around 66.92, indicating steady upside strength while still leaving room before reaching overbought conditions. However, the broader trend continues to signal consolidation, as price action lacks a decisive breakout. 

Commodity Update:  

The U.S. dollar climbed to its highest level in one week against currencies on Monday as renewed tensions between the United States and Iran, along with hopes of a Middle East peace deal, pushed investors toward assets. Gold declined 1.31% to USD 4,815.90, silver fell 1.91% to USD 80.27, and copper slipped 0.22% to USD 13,343.00. Brent crude surged 5.23% to USD 95.00 after Tehran closed the Strait of Hormuz.

Technical Update:

On Friday, the S&P/TSX Composite Index advanced 294.06 points (+0.86%) to close at 34,346.29, reflecting a positive session with improving sentiment. From a technical perspective, the index continues to hold above its 21-period Simple Moving Average (SMA), which is acting as a dynamic support and maintaining a constructive near-term bias. Momentum remains firm, with the 14-period RSI around 66.92, indicating steady upside strength while still leaving room before reaching overbought conditions. However, the broader trend continues to signal consolidation, as price action lacks a decisive breakout. Immediate support is seen near 34,200, and a sustained move below this level could weaken sentiment, potentially exposing the index to a deeper pullback toward the 33,900 zone.