S&P/TSX Composite Index might open on a mildly positive note

The S&P/TSX Composite Index is expected to open on a mildly positive note following the recent sell-off, although underlying investor sentiment remains cautious. In the previous session, gains were largely driven by strength in the consumer cyclicals and consumer non-cyclicals sectors, providing only limited support to the broader market.

However, from a technical perspective, the index continues to trade below a key rising trendline resistance near the 32,100 level, highlighting ongoing fragility in the near-term structure. As long as this barrier remains unbroken, downside risks are likely to persist, with the possibility of further consolidation or corrective movement. Immediate resistance is placed around 32,100, and failure to reclaim this level may keep the overall market tone subdued in the near term.

Global Macro Backdrop

Global markets are starting the final trading day of March with a mixed risk tone:

• U.S. equities closed slightly higher in the previous session as investors reacted to resilient consumer spending data, though inflation expectations remain sticky and continue to limit upside conviction.
• Federal Reserve messaging remains cautious, reinforcing that policy easing will depend on further evidence of sustained inflation moderation.
• European markets are flat to slightly lower, as weaker manufacturing indicators continue to offset stability in services activity.
• Asian equities ended mixed, with China supported by policy easing expectations while Japan faced pressure from currency volatility and export concerns.

Bond yields remain elevated globally, reflecting persistent inflation uncertainty and reinforcing a “higher-for-longer” interest rate environment. 

Macro News Impacting the TSX

The TSX Composite is likely to see volatility tied to month-end and quarter-end flows:

• Portfolio rebalancing is expected to influence large-cap financials and energy stocks.
• Investors are awaiting upcoming Canadian macro data, particularly inflation and GDP readings, for guidance on the Bank of Canada’s policy path.
• Resource-heavy weighting of the TSX means commodity movements will continue to dominate index direction.

Commodity view — what to watch

• Crude oil: WTI crude oil futures surged toward $105 per barrel amid rising tensions in the Gulf. Iran attacked the Kuwaiti oil tanker Al-Salmi near Dubai, damaging its hull, signaling willingness to escalate strikes on energy infrastructure.
• Gold: Gold rose toward $4,600 per ounce on Tuesday as oil prices eased, but was still poised for around a 13% drop in March for its worst monthly performance since October 2008.
• Silver: Silver rose above $72 per ounce on Tuesday as oil prices eased, but remained on track for a decline of more than 20% in March, marking its worst monthly performance since September 2011.
• Copper: Copper held steady near $5.5 per pound on Tuesday but remained on track to lose nearly 10% in March, marking its worst monthly performance since July last year. 

Sector highlights

• Energy: Expected to remain stable with mild upside if oil prices hold firm into month-end.
• Materials: Supported by resilient gold and steady copper demand outlook.
• Financials: Likely to see volatility due to quarter-end portfolio rebalancing and bond yield sensitivity.
• Technology & Industrials: Expected to track broader global risk sentiment and U.S. market cues. 

Forex watch

• The Canadian dollar (CAD) is trading slightly stronger against the U.S. dollar, supported by stable oil prices and month-end flows.
• Currency movements may influence export-sensitive sectors, with a stronger CAD potentially weighing on energy and materials earnings expectations.

Bottom line:

The TSX Composite is expected to open with a mixed and potentially volatile tone as month-end flows influence trading activity. Commodity strength in energy and materials may provide support, while financials and growth sectors remain sensitive to macroeconomic signals and bond yield movements.

As March concludes, investors are likely to remain highly selective, focusing on positioning ahead of new economic data and the upcoming earnings cycle.