Canadian Stocks Soar as Rate Cuts Continue to Lift Markets

                                                        Source: Krish Capital Pty Ltd

Index Update:

Canadian stocks surged to new highs on Friday, with the recent interest rate cut decisions by the Bank of Canada as well as the US Federal Reserve on Wednesday continuing to lift market sentiment despite concerns from a section of analysts that valuations remain "stretched."

After opening higher than yesterday's close, the benchmark S&P/TSX Composite Index saw further upside as the day progressed before closing at 29,768.36, up by 314.83 points (or 1.07%). Today's value is a new record high for the index.

Macro Update:

In August, the unemployment rate crawled up to 7.1%, with inflation clocking in at 1.9%. A softening of the labor market compelled the BoC governing council to administer a rate cut.

Data released by Statistics Canada today revealed that Canadian retail sales excluding vehicles fell 1.2% month-over-month in July 2025, reversing a revised 2.2% gain in June.

Top Movers:

Among the individual stocks, Barrick Mining Corp (9.71%), Endeavour Silver Corp (9.25%), First Majestic Silver Corp (7.08%), Franco-Nevada Corp (5.62%) and Alimentation Couche-Tard Inc (2.53%) were the prominent gainers.

Our Stance:

Currently, the index is consolidating around a critical support zone near 29,500. Sustaining levels above this threshold will be pivotal for preserving investor confidence and maintaining the broader uptrend. Conversely, a decisive breakdown below 29,500 could signal short-term exhaustion of bullish momentum and open the door for a pullback, with immediate supports at 29,300 and 29,100 expected to cushion deeper declines.

Commodity Update:

The dollar held steady Monday as traders awaited speeches from Federal Reserve officials for clues on the U.S. rate outlook after the central bank resumed easing last week. Gold rose 0.56% to $3,726.70, silver gained 2.08% to $43.83, and copper inched up 0.10% to $10,002.75. Brent crude slipped 0.60% to $67.06, weighed down by EU measures targeting Russia’s energy revenues and Ukrainian strikes on infrastructure.

Technical Update:

On Friday, the S&P/TSX Composite Index advanced 314.03 points (+1.07%) to close at 29,768.36, supported by robust trading volumes that underscored investor confidence and reinforced the prevailing bullish momentum. From a technical perspective, the index maintains a firmly bullish structure, trading comfortably above its 21-period Simple Moving Average (SMA), which continues to act as a dynamic support level. Momentum readings also confirm strong buying pressure, with the Relative Strength Index (RSI) at 80.13, indicating overbought but still resilient conditions. Currently, the index is consolidating around a critical support zone near 29,500. Sustaining levels above this threshold will be pivotal for preserving investor confidence and maintaining the broader uptrend. Conversely, a decisive breakdown below 29,500 could signal short-term exhaustion of bullish momentum and open the door for a pullback, with immediate supports at 29,300 and 29,100 expected to cushion deeper declines.