Canadian stocks regained momentum on Monday After Opening Negative

Index Update:  After falling sharply early in the session due to inflationary pressures brought on by the raging Middle East conflict, Canadian stocks rebounded and eventually closed modestly higher on Monday after U.S. President Donald Trump hinted at the end of the war. The benchmark S&P/TSX Composite Index plunged by as much as 2.2 percent in early trading but regained momentum as the day progressed before settling at 33,189.32 up by 105.60 points (or 0.32%).

Macro Update: A Financial Times report that stated that the G7 countries were planning to release petroleum from their strategic reserves after consulting with the International Energy Administration capped the gains on oil prices leading to a pullback. However, a meeting between G7 ministers and IEA today did not result in any concrete development and oil prices bounced back higher sharply. On the trade front, last Friday, Canada's new, chief trade negotiator Janice Charette met U.S. Trade Representative Jamieson Greer to discuss the upcoming review of the Canada-United States-Mexico Agreement on free-trade. Despite several disagreements with Trump, last week, Canadian Prime Minister Mark Carney offered to stand by the U.S. in its war against Iran. Reportedly, Carney would not be taking part in a debate in the House of Commons today on Canada's stance on the Middle East war.

Top Movers:  Among the individual stocks, Celestica Inc (7.07%), Kinaxis Inc (6.22%), Bitfarms Ltd (3.62%), and Methanex Corp (6.53%) were the prominent gainers.

Our Stance: Momentum indicators also reflect a subdued tone, with the 14-period Relative Strength Index (RSI) standing at 47.40, suggesting mild negative momentum. On the downside, immediate support is located near the 32,800 level. A decisive break below this zone could increase selling pressure and potentially lead to further consolidation toward the 32,500 level in the near term.

Commodity Update:

The U.S. dollar weakened, losing some of its safe-haven appeal amid speculation that the Middle East conflict may remain limited. Improved risk sentiment supported metals, with gold rising 1.51% to USD 5,181.50, silver surging 5.96% to USD 89.54, and copper gaining 1.17% to USD 13,083.00. Meanwhile, Brent crude fell 6.60% to USD 92.45 after hitting a three-year high earlier, as hopes of easing geopolitical tensions reduced concerns over global oil supply disruptions.

Technical Update:

The S&P/TSX Composite Index advanced 105.60 points, or 0.32%, to close at 33,182.32 on Monday, with strong trading volumes highlighting healthy investor participation. Despite the gain, the index continues to trade below its 21-period Simple Moving Average (SMA), which is acting as a dynamic resistance level and indicating a cautious near-term technical structure. Momentum indicators also reflect a subdued tone, with the 14-period Relative Strength Index (RSI) standing at 47.40, suggesting mild negative momentum. On the downside, immediate support is located near the 32,800 level. A decisive break below this zone could increase selling pressure and potentially lead to further consolidation toward the 32,500 level in the near term.