Canadian stocks turned weak on Tuesday

Index Update:  After opening higher than yesterday's close, the benchmark S&P/TSX Composite Index remained volatile through the session before settling just shy of yesterday's record peak at 32,870.36, down by 4.34 points (or 0.01%).

Macro Update:  Data from the Labor Department revealed that month-over-month core consumer prices in the US, (which exclude food and energy) rose by 0.2% from the previous month for December 2025. The annual core consumer price inflation rate, stood at 2.6% in December 2025, Month-over-month consumer prices increased by 0.3% in December in line with market estimates. The annual inflation rate in the US remained at 2.7% in December 2025, again in line with market expectations. Data released by Statistics Canada today revealed that the month-over-month building permits in Canada fell by 13.1% to C$12.0 billion in November 2025. This is the first decline after two months of growth which is well-below market expectations of a 6.5% drop. Expectations of a rate cut by the central banks of both Canada and the U.S. this month-end remains muted.

Top Movers:  Among the individual stocks, Enerflex Ltd (6.93%), Cenovus Energy Inc (5.93%), International Petroleum Corp (5.34%), Ssr Mining Inc (4.15%), and Taseko Mines Ltd (3.91%) were the prominent gainers.

Our Stance: While the RSI is elevated, it continues to signal strong momentum rather than an immediate reversal, suggesting the market may consolidate before attempting another leg higher. On the downside, immediate support is located near the 32,800 level. A decisive break below this zone could trigger a deeper corrective move toward the 32,600 area. 

Commodity Update:  The U.S. dollar advanced to near a one-month high in early Asian trade after U.S. CPI data broadly met expectations, reinforcing views that the Federal Reserve will keep rates unchanged this month despite political pressure. Gold climbed 0.63% to USD 4,628.20, silver jumped 3.84% to USD 89.68, and copper rose 1.56% to USD 13,388.20. Brent crude edged down 0.14% to USD 65.38, easing after four sessions of gains as Venezuela resumed exports, while concerns over potential Iranian supply disruptions amid civil unrest continued to support prices.

 Technical Update:

The S&P/TSX Composite Index edged marginally lower on Tuesday, declining 4.34 points (−0.01%) to close at 32,870.36, as mild short-term profit-taking paused the recent upside momentum. Despite the negligible decline, the broader technical structure remains firmly constructive, suggesting that the prevailing uptrend is still intact. From a trend perspective, the index continues to trade comfortably above its 21-period Simple Moving Average (SMA).  Momentum indicators also remain supportive. The 14-period Relative Strength Index (RSI) is currently positioned around 71.45, reflecting sustained strength in price action. While the RSI is elevated, it continues to signal strong momentum rather than an immediate reversal, suggesting the market may consolidate before attempting another leg higher. On the downside, immediate support is located near the 32,800 level. A decisive break below this zone could trigger a deeper corrective move toward the 32,600 area.