Canadian stocks plummeted on Friday

Index Update:  After opening well below yesterday's close, today the benchmark S&P/TSX Composite Index traded below the flatline throughout the session before settling at 31,923.52, down by 1092.61 points (or 3.31%).

Macro Update:  After its first meeting in 2026, forecasting tepid growth for the year, the Bank of Canada held interest rates at 2.25% on January 28. At the time of the announcement, the central bank stated that U.S. trade restrictions and tariff uncertainty are disrupting Canada's growth. Given the confrontational stance adopted by Trump against Canada, concerns are growing among economists if the U.S. will amicably renew the Canada-United States-Mexico free-trade agreement failing which a larger swathe of Canadian exports to the U.S. would suffer 35% tariffs, denting the economy severely. Data released by Statistics Canada today revealed that Canadian GDP expanded by 0.1% from the previous month in December 2025. The official data showed essentially unchanged output in November.

Top Movers:  Among the individual stocks, BCE Inc (2.41%), Quebecor Inc (2.18%), Brookfield Renewable Partners LP (6.03%), 5N Plus Inc (3.57%), and Bausch Health Companies Inc (3.44%) were the prominent gainers.

Our Stance:  Momentum indicators remain positive, with the 14-period Relative Strength Index (RSI) at 63.79. Immediate support is seen at 33,000, with a further corrective move toward 32,700 possible if breached. Overall, the TSX maintains its positive structure, and the current dip is viewed as a normal pause within an upward trend.

Commodity Update:  The dollar firmed on Monday after precious metals faced sharp losses last week, driven by profit-taking and lingering uncertainty over U.S. monetary policy. Gold slipped 0.19% to USD 4,736.00, while silver rebounded 2.39% to USD 80.84. Copper declined 2.72% to USD 12,804.80. Brent crude fell 3.30% to USD 67.07 as easing U.S –Iran tensions and unchanged OPEC+ output prompted profit booking.

Technical Update:

The S&P/TSX Composite Index edged lower on Friday, closing at 31,923.52, as short-term profit-taking cooled recent upside momentum. Despite the pullback, the broader technical outlook remains constructive, suggesting a period of healthy consolidation rather than a trend reversal. The index continues to trade above its 50-period Simple Moving Average (SMA), which remains an important dynamic support level. Momentum indicators are still supportive, with the 14-period Relative Strength Index (RSI) at 38.98, indicating easing momentum without signalling excessive weakness. On the downside, 31,900 stands as the immediate support level, while a break below this zone could open the door for further consolidation toward 31,600.