Canadian stocks edged lower on Tuesday

index Update:

Canadian stocks edged lower on Tuesday following fresh U.S. military attacks on Iran yesterday amid a ceasefire holding in place while an Iranian team is preparing in Qatar for a potential deal with the U.S.

After opening below yesterday's close, today the benchmark S&P/TSX Composite Index traded negative throughout the session before settling at 34,653.87, down by 177.02 points (or 0.51%).

Macro Update:

Over the past few days, U.S. President Donald Trump has been sending mixed signals, raising the uncertainty over peace talks. Trump stated that negotiations were proceeding well but warned of a larger-scale attack in case the war resumes.

Later, Trump claimed that negotiations were going on in a constructive and orderly manner but claimed that he had asked his team not to rush into a deal.

In addition, Trump raised a surprise Demand whereby he wanted the leaders of several Arab nations to mandatorily sign on to the Abraham Accords to make the settlement with Iran historically significant and observed that he has asked his representatives to begin working on that.

Top Movers:

Among the individual stocks, Superior Plus Corp (6.67%), Brookfield Renewable Partners LP (4.96%), Capital Power Corporation (4.39%), Terravest Industries Inc (7.67%), Vizsla Silver Corp (6.21%), and Tamarack Valley Energy Ltd (3.22%) were the prominent gainers.

Our Stance:

The immediate support is seen around the 34,550 level, and a sustained move below this zone could trigger short-term consolidation toward 34,200. On the upside, a decisive breakout above the 34,800 resistance area may reinforce bullish sentiment and potentially pave the way for a move toward the 35,000 mark in the near term.

Commodity Update:  

The U.S. dollar weakened slightly on Wednesday as traders reduced expectations of further Interest Rate hikes amid improving hopes for a potential peace agreement between Washington and Iran, although fresh U.S. strikes continued to support safe-haven demand. Gold rose 0.08% to USD 4,538.50, silver gained 0.70% to USD 77.14, and copper advanced 0.67% to USD 13,730.10. Brent Crude declined 1.57% to USD 95.316 as U.S.-Iran negotiations continued despite recent exchange-of-fire reports.

Technical Update:

S&P/TSX Composite Index declined 177.02 points, or 0.51%, on Tuesday to close at 34,653.87. Despite the pullback, the index continues to trade above its 21-day Simple Moving Average (SMA), which remains an important dynamic support level and supports the broader bullish trend structure. Momentum indicators also remain constructive, with the 14-day Relative Strength Index (RSI) near 60.74, indicating healthy bullish momentum while still leaving room for additional upside before reaching overbought territory. Immediate support is seen around the 34,550 level, and a sustained move below this zone could trigger short-term consolidation toward 34,200. On the upside, a decisive breakout above the 34,800 resistance area may reinforce bullish sentiment and potentially pave the way for a move toward the 35,000 mark in the near term.