Canadian stocks edged higher on Wednesday

Index Update:  After opening a little above yesterday's close, the benchmark S&P/TSX Composite Index remained volatile throughout the session before finally settling at 31,160.54, up by 111.26 points (or 0.36%).

Macro Update:  The U.S. Fed is slated to announce its interest rate decision after its last meeting of the year next week. Following recent dovish comments by several Fed officials along with the latest economic releases indicating a weaker job market, markets are pricing in around an 89.0% chance of quarter-point rate cut by the Fed. The Bank of Canada's interest rate decision scheduled to be announced on the same day ahead when the U.S. Federal Reserve does, is now on the radar of traders. The tripartite free-trade deal between Canada, United States, and Mexico (CUSMA) is coming up for review by July 2026. Canada has major stakes in how the Trump administration approaches the review. Carney is facing pressure from the domestic front to slip in more goods under the pact while concerns arise if U.S. would withdraw from the trilateral deal itself.

Top Movers:  Among the individual stocks, International Petroleum Corp (7.74%), Tamarack Valley Energy Ltd (3.73%), Cenovus Energy Inc (3.66%), Curaleaf Holdings Inc (4.63%), and Tfi International Inc (3.23%) were the prominent gainers.

Our Stance:  Price action is currently consolidating near an important support zone around 31,100. Holding above this level will be critical for maintaining positive sentiment and preserving the broader uptrend. Conversely, a decisive breakdown below this support could signal weakening momentum and expose the index to a potential pullback toward 30,900 and 30,700.

Commodity Update:  The U.S. dollar weakened after soft data reinforced expectations of a Fed rate cut next week, lifting the yen and pushing the euro to a nearly seven-week high. Gold down 0.23% to USD 4,222.70, silver gained 0.17% to USD 58.735, and copper inched up 0.06% to USD 11,487.00. Brent crude up 0.43% to USD 62.94 as geopolitical risks from Ukrainian strikes on Russian oil sites supported prices, though fragile fundamentals capped upside.

Technical Update:

On Wednesday, the S&P/TSX Composite Index advanced 111.26 points, or 0.36%, to close at 31,160.54. The upward move was supported by healthy trading volumes, reflecting firm investor confidence and reinforcing the prevailing bullish momentum. From a technical standpoint, the index continues to trade comfortably above its 21-period Simple Moving Average (SMA), which remains a key dynamic support and confirms the short-term uptrend. Momentum conditions also remain favorable, with the 14-period Relative Strength Index (RSI) at 60.71, indicating sustained buying pressure. Price action is currently consolidating near an important support zone around 31,100. Holding above this level will be critical for maintaining positive sentiment and preserving the broader uptrend. Conversely, a decisive breakdown below this support could signal weakening momentum and expose the index to a potential pullback toward 30,900 and 30,700.