Canadian stocks surged on Monday, extending Friday's gains

Index Update: Canadian stocks surged on Monday, extending Friday's gains, aided by expectations of another U.S. Federal Reserve rate cut in December getting firmer after recent remarks by two Fed officials.

After opening just above the previous week's close, the benchmark S&P/TSX Composite Index soon gained momentum to trade on the upside throughout the session before settling at 30.604.35, up by 443.70 points (or 1.47%).

Macro Update: Against the backdrop of recent jobs and inflation numbers, last Friday, John Williams, President and CEO of the Federal Reserve Bank of New York, indicated he expects the central bank to lower rates due to the ongoing labor market weakness and stressed that "there is room for further adjustment."

Today, Federal Reserve Governor Christopher Waller told Fox Business he is in favor of an interest rate cut in December due to concerns about the labor market.

Dovish comments from the U.S. Fed officials have reaffirmed investors' expectations for another rate cut next month.

On the sidelines of G20 summit held in Johannesburg, South Africa, Prime Minister Mark Carney and Indian Prime Minister Narendra Modi discussed prospects of increasing bilateral trade ties in key sectors.

Data released by Statistics Canada today revealed that Canada's manufacturing sales are expected to fall 1.1% in October after a 3.3% increase in September with a sharp descent projected in the chemical and wood product subsectors.

Top Movers: Among the individual stocks, Bitfarms Ltd (15.50%), Celestica Inc (14.95%), Shopify Inc (5.21%), Fortuna Mines (10.44%), Aris Gold Corporation (10.36%), and Orla Mining Ltd (9.07%) were the prominent gainers.

Our Stance: The index is currently consolidating around a crucial support zone near 30,500. Sustaining price action above this level will be important for preserving sentiment and keeping the broader uptrend intact. However, a decisive break below 30,500 could signal weakening momentum and open the door to a short-term pullback. In such a scenario, immediate downside support levels are located at 30,300 and 30,200, which are expected to help limit deeper declines.

Commodity Update: The U.S. dollar held steady on Tuesday as markets weighed the likelihood of a Fed rate cut next month following dovish remarks from policymakers. The yen stayed fragile, keeping intervention risks elevated. In commodities, gold rose 0.33% to USD 4,183.40, silver added 0.31% to USD 51.30, and copper climbed 1.17% to USD 10,880.75. Brent crude slipped 0.30% to USD 63.20 as supply concerns overshadowed geopolitical uncertainties.

Technical Update:

On Monday, the S&P/TSX Composite Index climbed 443.70 points (+1.47%) to close at 30,604.35, supported by strong trading volumes that signaled firm investor confidence and reinforced the prevailing bullish momentum. From a technical standpoint, the index maintains a solid upward structure, continuing to trade well above its 50-period Simple Moving Average (SMA), which remains a key dynamic support level. Momentum conditions also appear healthy, with the Relative Strength Index (RSI) at 56.83, indicating balanced but strengthening buying interest. The index is currently consolidating around a crucial support zone near 30,500. Sustaining price action above this level will be important for preserving sentiment and keeping the broader uptrend intact. However, a decisive break below 30,500 could signal weakening momentum and open the door to a short-term pullback. In such a scenario, immediate downside support levels are located at 30,300 and 30,200, which are expected to help limit deeper declines.