Canadian Stocks Edge Lower Amid New Iranian Peace Proposal

Index Update:

Canadian stocks edged down Friday as the Strait of Hormuz blockade continued to weigh on markets, though losses were tempered by reports that Iran has submitted a new peace proposal to the U.S. aimed at ending the Gulf conflict.

After opening a little higher than yesterday's close, today the benchmark S&P/TSX Composite Index gave ground later to trade lower before settling at 33,891.18, down by 73.15 points (or 0.22%).

Macro Update:

Major central banks, including the Bank of Canada as well as the U.S. Federal Reserve, held their respective interest rates unchanged in their recent monetary policy meetings.

Last weekend, Trump cancelled a second round of peace talks between the U.S. and Iran.

On Monday, Iran offered a peace proposal through which it wanted discussions on Iran's nuclear ambitions to take place at a later date.

Aside from the effects of skyrocketing oil prices on the economy, Canadian investors are focused on the outcome of the Canada-U.S. trade talks ahead of the upcoming Canada-United States-Mexico Agreement renewal.

Data released by S&P Global Canada today revealed that the Manufacturing Purchasing Managers' Index rose to 53.30 in April from 50.00 in March. Notably, this is the strongest improvement in business environment since June 2022.

Top Movers:

Among the individual stocks, Docebo Inc (7.82%), Shopify Inc (5.22%), Coveo Solutions Inc (3.39%), and AltaGas Ltd (2.53%) were the prominent gainers.

Our Stance:

The broader trend suggests consolidation, as the index lacks a strong breakout trigger. Immediate support is seen near 33,700; a sustained break below this level could weaken sentiment and potentially lead to a deeper pullback toward the 33,400 zone.

Commodity Update:  

The U.S. dollar steadied in Asian trade, while regional currencies stayed range-bound amid Middle East tensions and U.S. rate uncertainty. Gold fell 0.47% to USD 4,622.96, silver declined 0.35% to USD 76.165, and copper fell 0.35% to USD 12,968.73. Brent crude rose 0.11% to USD 108.28, supported by supply risks despite higher Organization of the Petroleum Exporting Countries output.

Technical Update:

On Friday, the S&P/TSX Composite Index declined by 73.15 points (0.69%) to close at 33,891.18, reflecting a mildly negative tone. From a technical perspective, the index continues to trade above its 50-period Simple Moving Average (SMA), which is acting as dynamic support and helping maintain a constructive near-term bias. Momentum remains relatively stable, with the 14-period RSI near 55.42, indicating balanced conditions with room for gradual upside. However, the broader trend suggests consolidation, as the index lacks a strong breakout trigger. Immediate support is seen near 33,700; a sustained break below this level could weaken sentiment and potentially lead to a deeper pullback toward the 33,400 zone.