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

Taking cues from the positive tone in U.S. markets, the S&P/TSX Composite Index may open in positive territory, especially as energy prices continue to trade higher. The index declined by 142.86 points, or 0.42%, to close at 33,477.71 on Thursday after failing to move back above the ascending trendline drawn from April 2025. Despite the pullback, trading volume remained relatively light and the index continues to hold above the gap created on 8 April, which keeps the near-term tone constructive. The 14-period RSI also remains above its midpoint, supporting the view that momentum has not weakened materially. Support is seen near 31,131 points, while resistance is placed around 34,545 points.

Global Macro Backdrop

Global markets are entering the final trading session of the week with a slightly defensive tone:

• U.S. equities closed mixed in the previous session as investors reacted to firm economic data that reinforced the “higher-for-longer” interest rate narrative.
• Federal Reserve officials continue to signal caution on rate cuts, emphasizing that inflation remains above target despite some moderation.
• European markets are trading modestly lower, weighed down by weak industrial output and cautious corporate outlooks.
• Asian equities ended mixed, with China showing limited gains on policy support expectations, while other regional markets remained subdued.

Global bond yields remain elevated, reflecting continued uncertainty around the timing of monetary easing.

Macro News Impacting the TSX

The TSX Composite is expected to open in a tight range with a slight downside bias:

• Investors are positioning ahead of key Canadian economic data releases, particularly inflation and employment indicators.
• End-of-week profit-taking may influence trading activity after recent stabilization in early April.
• Commodity-linked sectors remain the primary drivers of index performance, keeping TSX sensitive to global resource price movements.

Commodity view — what to watch

• Crude oil: Oil prices edged slightly higher on Friday, with WTI crude futures trading near $98 per barrel, though the benchmark remained on track for its largest weekly decline in nine months.
• Gold: Gold steadied above $4,700 per ounce on Friday and remained on course for a third consecutive weekly gain, as the US-Iran ceasefire triggered a sharp decline in oil prices and eased concerns over renewed inflation and potential interest rate hikes.
• Silver: Silver held above $75 per ounce on Friday and was on track for a third straight weekly advance, as the US-Iran ceasefire prompted a sharp drop in oil prices and eased fears of renewed inflation and further interest rate hikes.
• Copper: Copper futures steadied around $5.75 per pound on Friday and were on track for a third consecutive weekly advance, supported by optimism that the US-Iran ceasefire will hold and eventually lead to a reopening of the Strait of Hormuz. 

Sector highlights

• Energy: Expected to trade high to slightly lower on softer oil tone.
• Materials: Mixed, with lower gold strength offset by higher base metals.
• Financials: Likely range-bound ahead of inflation and growth data releases.
• Technology & Industrials: Expected to track global risk sentiment with limited catalysts. 

Forex watch

• The Canadian dollar (CAD) is slightly weaker against the U.S. dollar, reflecting firm U.S. macro data and softer commodity prices.
• A weaker CAD may offer some support to export-oriented sectors, particularly energy and mining companies.

Bottom line:

The TSX Composite is expected to open with a cautious tone as the week concludes, with limited directional conviction across sectors. While gold continues to provide a supportive base, weakness in oil and base metals may cap upside potential.

Overall sentiment remains balanced, with investors maintaining a defensive stance ahead of key economic data releases that could shape the next phase of monetary policy expectations in Canada and globally.