Canadian stocks slumped on Thursday

Index Update:  After opening below yesterday's close, today the benchmark  S&P/TSX Composite Index gathered momentum early in the session but gave ground later to trade below the flatline throughout the rest of the session before settling at 31,887.52, down by 495.08 points (or 1.53%).

Macro Update:  Last week, while holding the policy rate steady at 2.25%, the Governor of Bank of Canada Tiff Macklem suggested that the central bank was ready to raise rates only if circumstances warrant. In the U.S., investors have wound up their expectations on any rate cut in the near-term. The U.S. Federal Reserve adopted a "hawkish" stance in its meeting last week. There were no significant data releases on the economic front barring the average weekly earnings of Canadian non-farm payrolls employees, which showed a rise of 2.0% year-over-year to C$1,320.46 in January from 1.9% in December, according to Statistics Canada.

Top Movers:  Among the individual stocks, Emera Incorporated (1.20%), Fortis Inc (0.81%), Brookfield Infra Partners (0.69%), and Northland Power Inc (0.47%) were the prominent gainers.

Our Stance: Momentum indicators have softened, with the 14-period Relative Strength Index (RSI) at 38.70, pointing to weakening price strength in the near term. On the downside, immediate support is seen near 31,600, and a break below this level could trigger further consolidation toward the 31,300 zone.

Commodity Update:  The U.S. dollar strengthened toward multi-month highs on Friday as investors sought safe-haven assets amid escalating Middle East tensions and uncertainty over diplomatic progress between the United States and Iran. Gold rose 1.00% to USD 4,451.82, silver gained 0.95% to USD 68.578, and copper increased 0.80% to USD 12,232.63. Meanwhile, Brent crude slipped 1.00% to USD 100.83, reflecting easing geopolitical risk premiums and cautious optimism over negotiations.

Technical Update:

The S&P/TSX Composite Index edged lower on Thursday, closing at 31,887.52, as profit-taking cooled recent upside momentum. Despite the pullback, the broader technical outlook remains constructive, suggesting a phase of healthy consolidation rather than a trend reversal. The index continues to trade above its 50-period Simple Moving Average (SMA), which is acting as a key dynamic support level and helping maintain the underlying bullish structure. However, momentum indicators have softened, with the 14-period Relative Strength Index (RSI) at 38.70, pointing to weakening price strength in the near term. On the downside, immediate support is seen near 31,600, and a break below this level could trigger further consolidation toward the 31,300 zone.