Canadian stocks posted sharp gains on Wednesday

Index Update: Canadian stocks posted sharp gains on Wednesday, extending yesterday's surge, amid positive hints of another rate cut from yesterday's speech by U.S. Fed Chair Jerome Powell as investors assessed the implications of escalating U.S.-China trade friction.

After opening above yesterday's close, the benchmark S&P/TSX Composite Index traded firmly positive throughout the session to finally close at 30,637.12, up by 283.51 points (or 0.93%).

Macro Update: Data released by Statistics Canada today revealed that Canada's month-on-month manufacturing sales fell 1.0% to C$69.4 billion in August after a 2.5% jump in July, performing slightly better than market expectations of a 1.5% decline.

Canada's month-on-month wholesale trade declined 1.2% month-on-month to C$85.4 billion in August, the first contraction in four months, reversing a 1.2% gain in July but beating estimates of a 1.3% drop.

Last week's jobs data revealed that the unemployment rate held steady at 7.1% in September as the economy added around 60,000 jobs in the month. The gains were concentrated in full-time work with 106,000 positions added in September.

The unexpected hiring surge dampened expectations for another interest rate cut by the BoC this month.

Top Movers: Among the individual stocks, Aya Gold and Silver Inc (13.89%), Endeavour Silver Corp (9.17%), Discovery Silver Corp (8.69%), Bitfarms Ltd (10.17%), and Celestica Inc Sv (9.02%) were the prominent gainers.

Our Stance: The index is currently consolidating near a key support zone around 30,400. Holding above this level will be crucial to maintain market confidence and preserve the broader uptrend, while a decisive break below could indicate bullish fatigue, potentially leading to a pullback toward 30,100 and 29,900.

Commodity Update: The U.S. dollar weakened on Thursday amid concerns over the Sino-U.S. trade tensions and growing expectations of a Federal Reserve rate cut this year. Precious metals gained, with gold up 1.24% to $4,243.70 and silver advancing 2.80% to $52.80. Copper edged higher by 0.16% to $10,637.15. Brent crude rose 1.10% to $62.57, supported by expectations of tighter supplies after President Trump said India would halt oil imports from Russia.

Technical Update:

On Wednesday, the S&P/TSX Composite Index rose 283.51 points (0.93%) to close at 30,637.12, supported by robust trading volumes, which underscore sustained investor confidence and reinforce the prevailing bullish momentum. Technically, the index remains in an uptrend, trading well above its 21-period Simple Moving Average (SMA), which continues to act as dynamic support. Momentum indicators remain constructive, with the 14-period RSI at 67.34, reflecting persistent buying pressure. The index is currently consolidating near a key support zone around 30,400. Holding above this level will be crucial to maintain market confidence and preserve the broader uptrend, while a decisive break below could indicate bullish fatigue, potentially leading to a pullback toward 30,100 and 29,900.