Canadian Stocks Tumble

index Update:

Reversing the previous session’s gains, Canadian stocks fell on Friday after the U.S.-China summit ended without any announcement on possible Chinese mediation to help end the U.S.-Iran conflict, reigniting concerns over further escalation and leaving the Hormuz crisis unresolved.

After opening below yesterday's close, today the benchmark S&P/TSX Composite Index traded firmly negative throughout the session before settling at 33,833.35, down by 434.92 points (or 1.27%).

Macro Update:

U.S. Treasury Secretary Scott Bessent had earlier stated that reopening of the Strait of Hormuz is more in China's interest than of the U.S. since China buys nearly 90% of Iranian oil and hence added that China will work "behind the scenes" to make that happen.

In a significant move, Prime Minister Mark Carney unveiled a strategy intended to double Canada's electricity generation by 2050, including adjusting its clean electricity rules. The total cost is expected to top C$1 trillion but the expenditure will be distributed between the federal and provincial governments as well as private sector players.

On the economic front, data released by Canada Mortgage and Housing Corporation revealed that housing starts in Canada jumped 17.00% to an annualized 279,300 units in April from the previous month, well above market forecasts of 240,000 units.

Data released by Statistics Canada today revealed that Canada's Manufacturing sales rose 3.00% to C$73.6 billion in March, the highest since January. Sales increased in 9 of 21 subsectors, led by petroleum and coal products.

Top Movers:

Among the individual stocks, Strathcona Resources Ltd (6.92%), Baytex Energy Corp (4.41%), Tamarack Valley Energy Ltd (4.30%), Docebo Inc (5.56%), and Shopify Inc (3.18%) were the prominent gainers.

Our Stance:

Immediate support is located near the 33,700 level. A sustained break below this zone could trigger an extended consolidation phase and potentially lead to a decline toward 33,400 in the near term. On the upside, a decisive move above the 34,000 resistance level would improve bullish sentiment and could pave the way for a further advance toward the 34,300 area.

Commodity Update:

The U.S. dollar weakened on Tuesday after Donald Trump said a planned strike on Iran had been postponed as negotiations continued, easing immediate geopolitical concerns. Gold slipped 0.14% to USD 4,551.90 per ounce, silver declined 0.99% to USD 76.70, and copper fell 0.66% to USD 13,506.80. Brent Crude dropped 2.30% to USD 109.55 per barrel after the U.S. extended a sanctions Waiver on seaborne Russian oil exports, helping offset potential Middle East Supply disruptions and reducing near-term energy market pressure.

Technical Update:

S&P/TSX Composite Index declined 434.92 points, or 1.27%, on Friday to close at 33,833.35. Despite the pullback, the index continues to trade above its 50-day Simple Moving Average (SMA), which is acting as a reliable dynamic support and reinforcing the broader positive trend structure. Momentum indicators remain broadly supportive, with the 14-day Relative Strength Index (RSI) at 50.67, suggesting neutral-to-positive momentum while still leaving room for further upside. Immediate support is located near the 33,700 level. A sustained break below this zone could trigger an extended consolidation phase and potentially lead to a decline toward 33,400 in the near term. On the upside, a decisive move above the 34,000 resistance level would improve bullish sentiment and could pave the way for a further advance toward the 34,300 area.