The Canadian market closed marginally down

Image Source : Krish Capital Pty Ltd

Index Update: The benchmark S&P/TSX Composite Index ended down 22.68 points or 0.09% at 25,626.16, recovering more than 200 points from an early low of 25,439.39.

Macro Update: Tariff threats by U.S. President Donald Trump rendered the mood a bit cautious. Trump's threat to impose a 25% tariff on autos, alongside similar duties on semiconductors and pharmaceuticals.

Top Movers: AtkinsRealis gained 5.1%. NorthWest Company, Riocan REIT, NuVista Energy, MDA Space, Bausch Health Companies, Parex Resources, Advantage Oil & Gas, Dollarama, Barrick Gold Corporation, Aecon Group, Tourmaline Oil Corp, Saputo, ATCO, Bombardier and MEG Energy Corp gained 2.3 to 4%.

Our Stance: Despite the pullback, the index remains above its 21-period Simple Moving Average (SMA), signaling a continuation of the short-term uptrend. Investors should keep a close watch on the key support level at 25,300, which has historically served as an important threshold. Holding above this level could support a rebound, while a breakdown below it may trigger further declines, with additional support zones around 25,100 to 25,000.

Commodity Update: The yen strengthened while the U.S. dollar remained steady as investors digested U.S. President Donald Trump's latest tariff proposals and their potential global economic impact. This also raised questions about future interest rate decisions by major central banks. Geopolitical tensions rose as Trump labelled Ukrainian President Volodymyr Zelenskyy a "dictator" amid ongoing peace talks between Russia and Ukraine. In commodities, gold rose 0.65% to $2955.80, silver gained 0.56% to $33.23, and copper increased 0.48% to $9490.00. Meanwhile, Brent oil dropped 0.30% to $75.83, weighed down by an unexpected rise in U.S. crude oil inventories.

Technical Update: On Wednesday, the S&P/TSX Composite Index declined by 22.68 points, or 0.09%, closing at 25,626.16. The downturn was primarily driven by weakness in the basic materials sector, which fell 2.14%, weighing on overall market sentiment. Despite the pullback, the index remains above its 21-period Simple Moving Average (SMA), signaling a continuation of the short-term uptrend. However, the Relative Strength Index (RSI) at 56.25 suggests some underlying weakness, indicating the potential for further declines if selling pressure persists. Investors should keep a close watch on the key support level at 25,300, which has historically served as an important threshold. Holding above this level could support a rebound, while a breakdown below it may trigger further declines, with additional support zones around 25,100 to 25,000. A breach of these levels could indicate a deeper correction and a shift in market sentiment.