Canadian Stocks End Roughly Flat

Image Source: Krish Capital Pty Ltd

Index Update:

Canadian stocks ended little changed on Wednesday even though, as investors anticipated, the Canadian central bank reduced the base rate to a three-year low and the US central bank also lowered rates.

After opening just below yesterday's close, the benchmark S&P/TSX Composite Index gathered momentum to reach an intraday high of 29,465.14. However, the index saw significant volatility in late-day trading before finally settling at 29,321.66, up by just 6.43 points (or 0.02%).

Macro Update:

The Bank of Canada cut its benchmark interest rate by 25 basis points to 2.50% in its September 2025 decision today. Announcing the new rates, Bank of Canada Governor Tiff Macklem stated that the risks have shifted since the central bank's last interest rate decision in July.

Data released by Statistics Canada on Tuesday revealed that annual inflation stood at 1.9% in August, with core inflation hovering around 3% year-over-year. August saw a loss of 60,000 jobs, indicating a weak labor market.

Meanwhile, in the US, the Federal Reserve followed suit and cut the federal funds rate by 25 basis point today bringing the target range to 4.00% to 4.25%, in line with expectations.

Recent labor market data in the US showed fissures in the US, though inflation remains stubborn.

Top Movers:

Among the individual stocks, Cogeco Communications Inc (1.12%), Bausch Health Companies (1.18%), Magna International (1.48%), and TMX Group Ltd (2.83%) were the prominent gainers.

Our Stance:

The index is currently consolidating around a critical support zone near 29,100. Holding above this level will be key to sustaining market confidence and the broader uptrend. A decisive breakdown, however, could point to short-term bullish exhaustion, opening the door for a pullback toward the next support levels at 28,800 and 28,600.

Commodity Update:

The U.S. dollar steadied Thursday after hitting a 3-1/2-year low before rebounding, as traders assessed the Fed’s cautious stance on further rate cuts. Gold slipped 0.48% to $3,700, silver fell 0.32% to $42.01, and copper edged down 0.01% to $9,995.35. Brent crude dropped 0.50% to $67.62 after a recent rally, with prices supported earlier by Fed cuts, mixed U.S. inventory data, and supply concerns from Russia-Ukraine tensions.

Technical Update:

On Wednesday, the S&P/TSX Composite Index advanced marginally by 6.43 points (0.02%), closing at 29,321.66. The modest gain was supported by robust trading volumes, a sign of sustained investor confidence that reinforces the prevailing bullish momentum. Technically, the index maintains a firm bullish structure, trading well above its 21-period SMA, which continues to act as a dynamic support. Momentum indicators remain strong, with the RSI at 73.66, signaling persistent buying pressure. The index is currently consolidating around a critical support zone near 29,100. Holding above this level will be key to sustaining market confidence and the broader uptrend. A decisive breakdown, however, could point to short-term bullish exhaustion, opening the door for a pullback toward the next support levels at 28,800 and 28,600.