Canadian stocks edged lower on Wednesday

index Update:

Canadian stocks edged lower on Wednesday, extending the losses from yesterday's session, as a peace deal between the U.S. and Iran to end the gulf war remains elusive, compelling investors to hold back from risky moves.

After opening lower than yesterday's close, today the benchmark S&P/TSX Composite Index traded negative throughout the session before settling at 34,412.05, down by 241.82 points (or 0.70%).

Macro Update:

Yesterday, U.S. Trade Representative Jamieson Greer stated that the U.S. has significant trade issues with Canada. He also stressed that as long as the U.S. has a giant Trade Deficit, it will impose tariffs even on countries in its own hemisphere.

Greer added that issues with Canada travel past trade "irritants" and hence it is difficult to predict a resolution.

Economists are concerned of the structure of the talks that left out Canada in the opening round of discussions as they view that decisions made during U.S.-Mexico discussions could affect Canadian industries.

On the economic front, it was an unremarkable day for Canadian market with no important data releases.

Top Movers:

Among the individual stocks, Alimentation Couche-Tard Inc (1.93%), Rogers Communications Inc (2.06%), Cae Inc (3.99%), Mda Space Ltd (3.69%), and Air Canada (3.34%) were the prominent gainers.

Our Stance:

The immediate support is seen around the 34,300 level, and a sustained move below this zone could trigger short-term consolidation toward 34,000. On the upside, a decisive breakout above the 34,600 resistance area may reinforce bullish sentiment and potentially pave the way for a move toward the 34,900 mark in the near term.

Commodity Update:  

The U.S. dollar held near a one-week high on Thursday after reports that the United States carried out fresh strikes on an Iranian military site, boosting safe-haven Demand. Gold dropped 1.25% to USD 4,425.55, while silver fell 2.17% to USD 73.25. Copper also declined 0.19% to USD 13,521.15. Meanwhile, Brent Crude oil surged 1.90% to USD 96.03 following the reported attack on Iran, although prices remained under pressure after reports suggested Iran may reopen the Strait of Hormuz to commercial shipping within 30 days.

Technical Update:

S&P/TSX Composite Index declined 241.82 points, or 0.70%, on Wednesday to close at 34,412.05. 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 56.15, indicating healthy bullish momentum while still leaving room for additional upside before reaching overbought territory. Immediate support is seen around the 34,300 level, and a sustained move below this zone could trigger short-term consolidation toward 34,000. On the upside, a decisive breakout above the 34,600 resistance area may reinforce bullish sentiment and potentially pave the way for a move toward the 34,900 mark in the near term.