Canadian Stocks Closes Higher

index Update:

Canadian stocks posted modest gains on Friday as investors reacted positively to progress in U.S.-Iran negotiations aimed at ending the conflict. However, the release of economic data suggesting the economy has technically entered a Recession tempered investor enthusiasm, limiting stronger market advances.

After opening higher than yesterday's close, today the benchmark S&P/TSX Composite Index gave ground initially but later gained momentum to trade positively throughout the rest of the session before settling at 34,769.14, up by 251.44 points (or 0.73%).

Macro Update:

On the economic front, data released by Statistics Canada revealed that the Gross Domestic Product in Canada decreased at an annualized 0.10% rate in the first quarter, extending the 1.00% drop from the previous period.

With imports surging, and falling Business Capital Investment (0.70%) and government capital investment (2.50%), the numbers reveal that three of the last four quarters have posted negative GDP growth.

Economists are concerned that the economy has slipped into a technical recession. However, since monthly GDP figures suggested mild positive growth in Q1 2026, the true trajectory of the economy is uncertain, according to experts.

Q2 2026 numbers will be released by Statistics Canada on August 28.

Yesterday, the Bank of Canada released its annual Financial Stability Report. The report warned of increasing vulnerabilities, especially from the Middle East war, all of which could crystallize and expose Canada's economy to more damage.

Top Movers:

Among the individual stocks, Celestica Inc (10.17%), Coveo Solutions Inc (7.49%), Kinaxis Inc (5.56%), Montage Gold Corp (8.34%), Equinox Gold Corp (8.29%), and Aya Gold and Silver Inc (7.84%) were the prominent gainers.

Our Stance:

The key support is located around the 34,600 level, and a sustained break below this area could lead to a period of short-term consolidation, potentially exposing the 34,300 region. On the upside, a decisive breakout above the 34,900 resistance zone would strengthen bullish sentiment and could open the door for a move towards the 35,100 level in the near term.

Commodity Update:  

The U.S. dollar traded largely unchanged on Monday after posting a weekly decline, as investors focused on developments from Middle East peace talks and awaited further Central Bank policy signals. Gold fell 0.98% to USD 4,548.10 per ounce, silver slipped 0.06% to USD 75.82, while copper gained 0.45% to USD 13,677.80. Brent Crude declined 2.10% to USD 92.99 per barrel as renewed fighting between Israel and the Iranian-backed Hezbollah group in Lebanon kept Middle East Supply concerns in focus.

Technical Update:

The S&P/TSX Composite Index gained 251.44 points, or 0.73%, on Friday to close at 34,769.14, extending its positive momentum. From a technical perspective, the index continues to trade above its 21-day Simple Moving Average (SMA), which is acting as a key dynamic support level and reinforcing the broader bullish trend. Momentum indicators remain supportive, with the 14-day Relative Strength Index (RSI) holding near 61.08, suggesting healthy buying interest while still leaving room for further upside before overbought conditions emerge. Key support is located around the 34,600 level, and a sustained break below this area could lead to a period of short-term consolidation, potentially exposing the 34,300 region. On the upside, a decisive breakout above the 34,900 resistance zone would strengthen bullish sentiment and could open the door for a move towards the 35,100 level in the near term.