Canadian stocks posted strong gains on Monday

Index Update:

Canadian equities posted strong gains on Monday, extending their upward momentum from the previous two trading sessions, following Sunday’s announcement by U.S. President Donald Trump that the United States and Iran had reached a framework agreement—a claim later confirmed by Iran.

After opening higher than last Friday's close, today the benchmark S&P/TSX Composite Index traded firmly positive before settling at 35,275.64, up by 337.79 points (or 0.97%), traded firmly positive before settling at 34,937.85, up by 266.39 points (or 0.77%).

Macro Update:

US President Donald Trump said the deal would halt hostilities and reopen the Strait of Hormuz.

Oil prices fell, easing concerns that an energy-driven inflation spike could trigger a hawkish shift by global central banks.

Bond yields also declined, reducing worries over higher borrowing costs.

Top Movers:

Among the individual stocks, financial stocks traded higher, with Brookfield gaining 1.2%. Meanwhile, higher gold prices fuelled a rally in mining shares, with Agnico Eagle rising 5.6%, WPM advancing 6.8%, and Barrick adding 4.2%.

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 close to its 10-day low on Tuesday as improving risk sentiment followed a preliminary agreement to end the conflict between the United States and Iran. Market participants are also monitoring upcoming central bank meetings in Japan and Australia for inflation and policy cues. Gold declined 0.28% to USD 4,338.70 per ounce, silver fell 0.87% to USD 69.57, and copper eased 0.26% to USD 13,728.00. Brent crude oil rose by USD 0.30 to USD 83.42 per barrel amid continued supply concerns surrounding the Strait of Hormuz.

Technical Update:

The S&P/TSX Composite Index gained 337.79 points, or 0.97%, on Monday to close at 35,275.64, extending its recent rally and reflecting strengthening investor confidence. From a technical perspective, the index continues to trade comfortably above its 21-day Simple Moving Average (SMA), which remains a key dynamic support level and reinforces the broader bullish trend. Momentum indicators remain supportive, with the 14-day Relative Strength Index (RSI) hovering around 60.99. This suggests healthy buying interest while indicating that the market still has room to advance before approaching overbought conditions. Immediate support is seen near the 35,100 level. 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.