Canadian Stocks Rise as Expectations Grow for a Fed Rate Cut

Index Update:  After opening just above yesterday's close, the benchmark S&P/TSX Composite Index gained momentum early in the session and traded positively throughout the day before settling at 30,900.65, up by 296.30 points (or 0.97%).

Macro Update:  Today in the U.S., the Bureau of Labor Statistics data revealed that producer prices rose by 0.3% in September - matching forecasts - after edging down by 0.1% in August. On an year-on-year basis, the producer prices increased 2.70% in September. Month-on-month core producer prices (which exclude food and energy) edged up by 0.1%. In addition, the retail sales crept up 0.2% month-over-month in September following a 0.6% increase in August. Data from Statistics Canada revealed that the wholesale sales are expected to edge down 0.1% month-over-month in October after rising 0.6% in September. This advance estimate comes in the wake of low sales in the food, beverage and tobacco subsector as well as in the agricultural supplies industry group. In its October Monetary Policy Report, the Bank of Canada had stated that it expects fourth-quarter Gross Domestic Product to expand at an annualized rate of 1%.

Top Movers:  Among the individual stocks, Alimentation Couche-Tard Inc (4.91%), Premium Brands Holdings Corp (4.80%), Empire Company Ltd (2.41%), Brp Inc (7.95%), and Tecsys Inc (3.13%) were the prominent gainers

Our Stance: Currently, the index is consolidating just above a key support zone near 30,800. Maintaining levels above this area will be essential to preserving positive sentiment and the broader upward trajectory. However, a decisive move below this support could indicate fading momentum and open the door to a potential pullback toward 30,600 and 30,500. 

Commodity Update:  The dollar slipped on Wednesday after softer U.S. data strengthened expectations of a December rate cut and as markets bet the next Fed chair could lean more dovish. Precious metals gained, with gold up 0.83% at USD 4,199.50 and silver rising 1.12% to USD 51.64, while copper edged up 0.17%. Brent crude rose 0.19% to USD 62.67 after touching one-month lows amid progress in Ukraine–Russia peace talks.

Technical Update:

The S&P/TSX Composite Index advanced 296.30 points, or 0.97%, on Tuesday to close at 30,900.65. The rise was supported by strong trading volumes, underscoring sustained investor confidence and reinforcing the prevailing bullish momentum. From a technical standpoint, the index remains firmly positioned within an established uptrend, trading well above its 21-period Simple Moving Average (SMA), which continues to provide reliable dynamic support. Momentum signals also remain positive, with the 14-period Relative Strength Index (RSI) at 60.44, reflecting consistent buying interest. Currently, the index is consolidating just above a key support zone near 30,800. Maintaining levels above this area will be essential to preserving positive sentiment and the broader upward trajectory. However, a decisive move below this support could indicate fading momentum and open the door to a potential pullback toward 30,600 and 30,500.