Canadian stocks moved lower on Monday

Index Update:

Canadian equities edged lower on Monday as investors stayed cautious amid escalating tensions, with the U.S. and Iran moving to reinforce control over the Strait of Hormuz. The heightened conflict lifted oil prices and reignited inflation concerns.

After opening a little lower than previous week's close, today the benchmark S&P/TSX Composite Index gave away early gains and traded lower before settling at 33,638.87, down by 252.31 points (or 0.74%).

Macro Update:

Over the weekend, Trump reacted negatively to Iran's latest 14-point peace proposal, according to Israeli state-run Kan News.

U.S. Central Command stated that it would support the operation with nearly 100 land- and sea-based aircraft, drones, and 15,000 troops.

Meanwhile, Trump announced that Iran attacked a South Korean cargo ship while the U.S. eliminated seven Iran's boats entering the strait.

The Defense Ministry of the United Arab of Emirates stated that it intercepted ballistic missiles, cruise missiles, and drones from Iran across the country.

Top Movers:

Among the individual stocks, Kelt Exploration Ltd (2.61%), Vermilion Energy Inc (2.45%), Cenovus Energy Inc (2.44%), Baytex Energy Corp (2.36%), and Blackberry Limited (3.53%) were the prominent gainers.

Our Stance:

The broader structure points to a consolidation phase, as the index lacks a clear breakout catalyst. Immediate support is seen near 33,500; a sustained break below this level could weaken sentiment and may trigger a deeper pullback toward the 33,200 zone.

Commodity Update:  

On Tuesday, the U.S. dollar strengthened as safe-haven demand increased amid renewed Middle East tensions, including attacks on vessels in the Strait of Hormuz and a strike on a key energy facility in the UAE. Gold rose 0.36% to USD 4,549.60, silver edged up 0.01% to USD 73.53, while copper declined 0.56% to USD 12,896.60. Brent crude fell 0.50% to USD 113.85 as Iran-related conflict resolution stalled and maritime blockades disrupted oil flows.

Technical Update:

S&P/TSX Composite Index declined by 252.31 points (0.74%) on Monday to close at 33,638.87, reflecting a mildly negative undertone. From a technical perspective, the index continues to trade below its 21-period Simple Moving Average (SMA), which is acting as a dynamic resistance and capping near-term upside. Momentum remains relatively stable, with the 14-period Relative Strength Index (RSI) near 51.07, indicating balanced conditions and leaving room for gradual upside. However, the broader structure points to a consolidation phase, as the index lacks a clear breakout catalyst. Immediate support is seen near 33,500; a sustained break below this level could weaken sentiment and may trigger a deeper pullback toward the 33,200 zone.