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

The S&P/TSX Composite Index is expected to open on a softer note, extending weakness following the recent sell-off. In the previous session, gains were largely supported by the healthcare and basic materials sectors, but this provided only limited traction to the broader market.

From a technical perspective, the index remains capped below a key rising trendline resistance near the 33,100 level, highlighting continued fragility in the near-term structure. As long as this barrier holds, downside risks are likely to persist, with the possibility of further consolidation or corrective movement. On the downside, immediate support is seen around 32,700. A sustained break below this level could further dampen sentiment and reinforce the cautious near-term outlook.

Global Macro Backdrop

Global markets are starting the session with a slightly defensive tone:

• U.S. equities closed marginally lower in the prior session as investors reassessed growth expectations amid persistent inflation pressures and uncertain timing for Federal Reserve rate cuts.
• Federal Reserve officials continue to emphasize a patient, data-dependent stance, reinforcing expectations that monetary easing will not come in the near term.
• European markets are mixed, with modest gains in defensive sectors offset by weakness in industrial and export-sensitive stocks.
• Asian equities traded unevenly, as China’s policy support optimism is balanced against lingering concerns about property sector stability and global demand softness.

Global bond yields remain elevated, with real yields still acting as a headwind for high-valuation equities and supporting demand for defensive assets like gold. 

Macro News Impacting the TSX

The TSX Composite is likely to open with a narrow trading range as investors focus on macro clarity:

• Market participants are awaiting Canadian employment and inflation-related indicators for direction on Bank of Canada policy expectations.
• Early April flows are gradually normalizing after quarter-end rebalancing activity.
• The index remains highly sensitive to commodity price movements due to its heavy weighting in energy and materials.

Commodity view — what to watch

• Crude oil: WTI crude oil futures jumped more than 9% on Thursday, approaching 2022-highs of $109 per barrel, as hopes for an imminent resolution to the Iran conflict dimmed.
• Gold: Gold prices slid more than 4% to around $4,580 per ounce on Thursday, ending a four-day gain, as the US dollar rebounded after President Donald Trump offered no definitive timeline for ending the Middle East conflict.
• Silver: Silver prices slid more than 6% toward $70 per ounce on Thursday as the US dollar gained ground following President Donald Trump’s prime-time address.
• Copper: Copper futures slipped to below $5.6 per pound, retreating from a two-week high amid renewed concerns over economic growth after US President Donald Trump gave no clear timeline for ending the Iran conflict. 

Sector highlights

• Energy: Expected to trade flat with slight downside bias due to softer oil tone.
• Materials: Mixed, with gold strength offsetting weaker base metals sentiment.
• Financials: Likely range-bound as bond yields stabilize and investors await economic data.
• Technology & Industrials: Expected to follow broader global risk sentiment with limited catalysts.

Forex watch

• The Canadian dollar (CAD) is slightly stronger against the U.S. dollar, supported by stable commodity prices and modest risk-on sentiment in global markets.
• A firmer CAD may weigh modestly on export-heavy sectors, particularly energy and materials, though commodity strength partially offsets this impact.

Bottom line:

The TSX Composite is expected to open with a subdued but stable tone as markets transition deeper into April trading. Commodity trends remain the primary driver, with gold providing support and oil offering limited directional conviction.

Overall, investor sentiment remains cautiously balanced, with attention shifting toward incoming economic data that could shape the next phase of monetary policy expectations in both Canada and the United States.