Canadian stocks moved slightly higher during trading on Tuesday

Image Source : Krish Capital Pty Ltd

Index Update:  The S&P/TSX Composite Index rose 0.33% to close at 25,616.86 on Tuesday, marking its highest level in twelve weeks, driven by positive movement in sectors connected to natural resources. The upward trend was further supported by the recently established 90-day accord between the US and China to lower tariffs on each other's goods

Macro Update:  On May 13, 2025, the US Consumer Price Index (CPI) data for April revealed an annualized inflation rate of 2.3%, a decrease from March's 2.4%, suggesting a deceleration in price increases. Core inflation, excluding food and energy, rose to 2.8% from 2.4%. This unexpected moderation in inflation has fueled expectations of potential Federal Reserve rate cuts later this year. Goldman Sachs has revised its forecast for US GDP growth in Q4 2025, increasing it to 1.0% from a previous estimate of 0.5%. This adjustment reflects a more optimistic outlook amid evolving trade dynamics and economic indicators.

Top Movers and Losers:  The biggest gainers of the session on the S&P/TSX Composite were Finning International Inc. (TSX: FTT), which rose 13.78%. Aya Gold & Silver Inc (TSX: AYA) added 12.06% and Celestica Inc. (TSX:  CLS) was up 9.12%. Biggest losers included Orla Mining Ltd (TSX: OLA), which fell 6.04%. Pet Valu Holdings Ltd (TSX: PET) declined 4.50% and Constellation Software Inc. (TSX: CSU) down 3.77%.

Our Stance:  The index remains in a strong uptrend, holding above its 21-period Simple Moving Average (SMA). The Relative Strength Index (RSI) sits at 66.75, signaling robust market conditions without yet reaching overbought territory, suggesting room for continued upside. Currently, the index is testing a key support level near 25,300. Holding this level is crucial to preserving the bullish momentum.

Commodity Update:   The U.S. dollar steadied Wednesday after its sharpest drop in over three weeks, driven by weaker U.S. inflation data that strengthened hopes for Fed rate cuts. Meanwhile, easing global trade tensions also supported market sentiment. Gold slipped 0.34% to $3,236.60, silver fell 0.92% to $32.79, and copper dipped 0.31% to $9,578.40. Brent crude edged up 0.10% to $66.53 amid a U.S.-China tariff truce and a weaker dollar. 

Technical Update:  On Tuesday, the S&P/TSX Composite Index climbed to 84.68 points to close at 25,616.86, posting a 0.33% gain. The energy sector contributed significantly to the day's strength, advancing 0.92%, while renewed optimism in energy stocks also supported the move. From a technical perspective, the index remains in a strong uptrend, holding above its 21-period Simple Moving Average (SMA). The Relative Strength Index (RSI) sits at 66.75, signaling robust market conditions without yet reaching overbought territory, suggesting room for continued upside. Currently, the index is testing a key support level near 25,300. Holding this level is crucial to preserving bullish momentum. A break below it could lead to a pullback, with the next major support zone on the weekly chart between 25,000 and 24,700. To maintain its upward trajectory and capitalize on further growth, the index must stay above these critical support levels.