Index Update:

Canadian stocks moved lower on Tuesday as the focus of investors shifts to the Interest Rate announcement by the U.S. Federal Reserve tomorrow amid increasing bets on a rate hike after concerns of prolonged Crude Oil Supply disruptions in the Middle East elevated inflationary pressures.

After opening below yesterday's close, today the benchmark S&P/TSX Composite index traded negative throughout the session before settling at 35,582.07, down by 120.46 points (or 0.34%).

Macro Update:

Domestic 10-year government bond yields approached the 4% threshold, remaining near their highest level since 2007.

The prospect of higher interest rates pressured credit-sensitive stocks, with the Federal Reserve set to raise its policy rate by 25 basis points on Wednesday.

Meanwhile, Prime Minister Mark Carney unveiled immediate tax write-offs for most new capital investments in an effort to spur growth and attract foreign capital. Carney is welcoming dozens of global investors to Toronto this week, seeking investment in key projects amid the Trade War with the US.

Top Movers:

The best performers of the session on the S&P/TSX Composite were Headwater Exploration Inc (TSX:HWX">TSX:HWX), which rose 5.92% or 0.82 points to trade at 14.67 at the close. Meanwhile, Tamarack Valley Energy Ltd (TSX:TVE">TSX:TVE) added 5.24% or 0.71 points to end at 14.27 and Suncor Energy Inc (TSX:SU">TSX:SU) was up 4.61% or 4.41 points to 99.99 in late trade.

Our Stance:

From a technical perspective, immediate support is positioned near 35,400. A sustained hold above this level could help stabilize the index and preserve the broader technical structure, potentially supporting a recovery towards the recent high near 35,700.

Commodity Update:

The U.S. dollar climbed to a two-week high ahead of the Federal Reserve’s latest interest rate decision, while Treasury yields increased borrowing costs. Gold rose 0.83% to USD 4,368.70, silver gained 2.12% to USD 65.18, and copper advanced 0.40% to USD 14,149.20. Brent Crude fell 0.50% to USD 108.22 as an unexpected rise in U.S. inventories outweighed Middle East supply disruptions. Crude also faced profit-taking after its recent sharp gains amid heightened regional tensions and Strait of Hormuz uncertainty.

Technical Update:

The S&P/TSX Composite Index declined 0.34% on Tuesday to close at 35,582.07, indicating limited near-term buying interest amid broader technical weakness. The index continues to trade below its 21-day Simple Moving Average (SMA), which is acting as a key dynamic resistance level and signalling continued technical weakness. The 14-day Relative Strength Index (RSI) stands at 41.09, suggesting weak-to-moderate momentum and subdued buying interest. Immediate support is positioned near 35,400. A sustained hold above this level could help stabilize the index and preserve the broader technical structure, potentially supporting a recovery towards the recent high near 35,700.