Rally On Bay Street

Image Source : Krish Capital Pty Ltd

Index Update: The Canadian stocks skyrocketed in reaction to President Donald Trump's announcement of a 90-day tariff pause. The benchmark S&P/TSX Composite Index spiked 1,220.13 points or 5.4 percent to 23,727.03, showing a substantial rebound after ending the previous session at its lowest closing level since last August.

Macro Update: President Donald Trump's announcement of a 90-day tariff pauses and White House official later clarified tariffs would be brought down to a "universal 10 percent" on most countries, including Canada.

Top Movers: The rebound was driven by strong gains across heavyweight sectors, particularly energy, with Canadian Natural, Suncor, Imperial Oil, and Cenovus surging between 6% and 11.8% amid recovering crude prices. Technology and financial stocks also staged a solid recovery, led by a 17.5% surge in Shopify and an 11.7% advance in Brookfield. Meanwhile, major mining equities continued to benefit from elevated bullion prices.

Our Stance: Despite the impressive rebound, the index remains below its 21-period Simple Moving Average (SMA), suggesting that downward momentum and selling pressure persist. A key support level is located at 23,400, marked by a significant horizontal trendline that could act as a floor for price stabilization. Holding above this level may pave the way for consolidation or a technical recovery.

Commodity Update: The U.S. dollar weakened against the yen and Swiss franc Thursday as President Trump escalated the trade war with China, raising tariffs to 125% while pausing others for 90 days. Gold rose 2.00% to $3,141.60, silver gained 2.27% to $31.10, and copper surged 4.03%. Brent crude fell 1.10% to $64.79 amid weak Chinese inflation data. Oil prices cooled after previous gains, as Trump’s tariff delay eased fears of a global recession.

Technical Update: The S&P/TSX Composite Index posted a strong performance on Wednesday, surging by 1,220.13 points (a 5.42% gain) to close at 23,727.03. The rally was supported by elevated trading volumes, indicating sustained investor optimism. Leading the charge was the technology sector, which jumped 10.38%, highlighting renewed confidence in tech stocks. Despite the impressive rebound, the index remains below its 21-period Simple Moving Average (SMA), suggesting that downward momentum and selling pressure persist. The Relative Strength Index (RSI) has dropped to 42.40, approaching oversold territory—pointing to the possibility of a short-term relief bounce. A key support level is located at 23,400, marked by a significant horizontal trendline that could act as a floor for price stabilization. Holding above this level may pave the way for consolidation or a technical recovery. Conversely, a decisive break below 23,400 could intensify selling pressure, potentially driving the index down toward the next major support zones at 23,000 and 22,500.