Canadian stocks posted strong decent gains on Tuesday

Index Update:

Canadian equities rose modestly on Tuesday, marking a fourth straight day of gains, as investor sentiment remained supported by optimism surrounding the preliminary U.S.-Iran agreement announced on Sunday. The deal, aimed at ending the conflict, is expected to be formally signed on Friday.

After opening higher than yesterday's close, today the benchmark S&P/TSX Composite Index  lost momentum early in the session but regained ground and traded positive throughout the rest of the session before settling at 35,389.58, up by 113.94 points (or 0.32%).

Macro Update:

Since this new Memorandum of Understanding would lead to the resumption of oil traffic via the Strait of Hormuz, market participants cheered the development. With supply concerns diminishing, crude oil prices nosedived and stock markets moved briskly higher.

On the domestic front, the review date for the Canada-United States-Mexico Agreement (or CUSMA) is a couple of weeks away. A renewal window begins on July 1 for the three nations to discuss critical issues and renew the pact for another 16 years.

Recently, the U.S. government listed Canada as a trading partner that failed to effectively ban importing goods with forced labor and planned to add a 10% tariff on Canadian imports.

Under the new Fed Chair Kevin Warsh, the two-day monetary policy meeting began today.

Top Movers:

Among the individual stocks, Ssr Mining Inc (10.21%), Discovery Silver Corp (5.42%), Centerra Gold Inc (4.30%), Lundin Gold Inc (3.86%), and Intact Financial Corporation (2.19%) were the prominent gainers.

Our Stance:

As long as the index remains above this zone, the current positive momentum and constructive technical structure are likely to remain intact. On the upside, attention is focused on the key resistance area around 35,450. A decisive break above this level could strengthen bullish sentiment, attract fresh buying interest, and open the door for a move toward the psychologically significant 35,650 mark in the near term.

Commodity Update:

The U.S. dollar remained steady on Wednesday after a four-session losing streak, supported by improving risk sentiment as expectations grew for a potential U.S.-Iran peace agreement. Currency markets also reacted to interest rate decisions from Japan and Australia, while investors awaited the Federal Reserve’s monetary policy decision under Chair Kevin Warsh. Gold slipped 0.03% to USD 4,352.70 per ounce, while silver rose 0.45% to USD 70.33 per ounce. Copper edged up 0.01% to USD 13,818.90 per tonne. Brent crude oil declined 0.60% to USD 79.43 per barrel amid easing geopolitical concerns.

Technical Update:

The S&P/TSX Composite Index advanced 113.94 points, or 0.32%, on Tuesday to close at 35,389.58, extending its recent rally and highlighting continued investor optimism. From a technical standpoint, the index remains firmly above its 21-day Simple Moving Average (SMA), which continues to serve as a key dynamic support level and reinforces the prevailing bullish trend. Momentum remains constructive, with the 14-day Relative Strength Index (RSI) near 62.17, indicating solid buying interest while remaining below overbought territory, suggesting further upside potential. Immediate support is located around the 35,200 level, and as long as the index holds above this zone, the current positive momentum and broader bullish structure are likely to remain intact.