Canadian stocks soared on Monday

Index Update:  Canadian equities rebounded sharply on Monday after three consecutive sessions of losses, buoyed by comments from U.S. President Donald Trump indicating that negotiations with Iran to end the conflict are progressing positively. Trump also reportedly directed U.S. forces to pause any planned military strikes on Iran for five days, further lifting market sentiment. The benchmark S&P/TSX Composite Index  traded firmly positive throughout the session before settling at 31,883.81, up by 566.40 points (or 1.81%%).

Macro Update:  Though Iran's semi-official news agency Mehr disputed this claim by stating Iran was not engaged in any direct or indirect negotiations, Trump's optimistic tone on delaying the strikes was enough to calm the tension that erupted with escalation concerns. As a result, with investor confidence boosted, stocks in Canada and the U.S. regained momentum. Soaring oil prices have already triggered inflationary pressures and prompted global central banks to hold interest rates steady. Last week, the Bank of Canada left interest rates unchanged at 2.25%. In the U.S., the Federal Reserve held the rates steady in the current 3.50% to 3.75% range. In Canada, market participants are also awaiting any breakthrough news on the ongoing Canada-U.S. negotiations on renewal of the Canada-United States-Mexico Agreement.

Top Movers:  Among the individual stocks, Boralex Inc (8.63%), Firan Technology Group Corp (8.62%), Celestica Inc (6.65%), Tecsys Inc (4.45%), Transcontinental Inc (43.88%), and Lundin Mining Corp (8.46%) were the prominent gainers.

Our Stance:  Momentum indicators remain subdued, with the 14-period Relative Strength Index (RSI) hovering around 38.72, signalling mild negative momentum. On the downside, immediate support is placed near 31,600; a decisive break below this level could trigger further consolidation toward the 31,300 zone in the near term.

Commodity Update:  The U.S. dollar weakened at the start of the week, extending losses after President Donald Trump delayed a planned strike on Iran’s power grid, easing fears of a prolonged conflict. Gold declined 1.10% to USD 4,390.60, silver fell 2.73% to USD 67.42, and copper slipped 1.11% to USD 12,049.70. Meanwhile, Brent crude surged 4.18% to USD 99.92 as Iran denied ongoing talks with the U.S. despite deal optimism.

Technical Update:

On Tuesday, the S&P/TSX Composite Index gained 566.40 points (1.81%) to close at 31,883.81. Despite the recent pullback, the broader market structure continues to reflect a phase of healthy consolidation rather than a definitive trend reversal. From a technical standpoint, the index remains below its 21-period Simple Moving Average (SMA) on the daily chart, which is acting as a dynamic resistance level and suggests a cautious near-term outlook. Momentum indicators remain subdued, with the 14-period Relative Strength Index (RSI) hovering around 38.72, signalling mild negative momentum. On the downside, immediate support is placed near 31,600; a decisive break below this level could trigger further consolidation toward the 31,300 zone in the near term.