Canadian Stocks plunged on Friday

index Update:

Canadian stocks declined sharply on Friday, giving back the previous session’s gains as stronger-than-expected employment data in both Canada and the U.S. reinforced expectations that interest rates could remain elevated for longer. The market was also pressured by profit-taking activity following the strong rally in the prior session.

After opening below yesterday's close, today the benchmark S&P/TSX Composite  Index traded firmly lower throughout the rest of the session before settling at 34,413.64, down by 803.42 points (or 2.28%).

Macro Update:

Data released by Statistics Canada today revealed that the Unemployment rate in Canada fell to 6.6% in May from 6.9% in the previous month, firmly below market expectations that it would remain at 6.9%.

Employment in Canada rose by 88,000 jobs in May, a 0.4% increase from April and well above market expectations for a gain of 10,000 jobs.

Employment increased among both private-sector workers (by 56,000 jobs) and public-sector employees (by 20,000 jobs).

The May data indicated that the first Job growth in 2026, reflecting resilience in labor market despite concerns of high energy prices and U.S. tariffs impacting the economy.

Similarly in the U.S., the nonfarm payrolls today showed that the U.S. economy added 172,000 jobs in May, well above forecasts of 85,000 and the unemployment rate remained at 4.30%. These data again indicated a robust Job Market in the U.S.

Top Movers:

Among the individual stocks, Transcontinental Inc (7.43%), Curaleaf Holdings Inc (6.57%), Metro Inc (4.37%), Weston George (3.79%), and CDN Apartment Un (2.28%) were the prominent gainers.

Our Stance:

The immediate support is seen near 34,070 and 33,725, while resistance is located around 34,758 and 35,102. A move above resistance could revive upside momentum, while a break below support may trigger additional consolidation.

Commodity Update:  

The U.S. dollar climbed to a near two-month high on Monday and ended the week higher, supported by resilient labor market data and persistent geopolitical tensions in the Middle East, which reinforced expectations that interest rates could remain elevated. Gold declined 0.70% to USD 4,335.40, while silver dropped 2.21% to USD 67.59. Copper gained 0.57% to USD 13,585.30. Brent Crude oil surged 2.60% to USD 95.49 amid escalating tensions between Iran and Israel.

Technical Update:

The S&P/TSX Composite Index declined 803.61 points, or 2.28%, to close at 34,413.45, snapping its recent upward momentum. Despite the pullback, the index continues to trade above its 50-day SMA at 33,897.65, indicating the broader trend remains constructive. However, the 14-day RSI eased to 50.79, reflecting weakening momentum and a more neutral near-term outlook. Immediate support is seen near 34,070 and 33,725, while resistance is located around 34,758 and 35,102. A move above resistance could revive upside momentum, while a break below support may trigger additional consolidation.