The Canadian market ended weak on Wednesday

Image Souce: Krish Capital Pty Ltd

Index Update: The benchmark S&P/TSX Composite Index ended down 143.08 points or 0.58% at 24,573.62, about 20 points off the day's low of 24,453.40. The index remained in negative territory right through the day's session.

Macro Update: The Canadian central bank cut rates by a half point today, as widely expected, reducing its target for the overnight rate by 50 basis points to 3.75%, with the Bank Rate at 4% and the deposit rate at 3.75%.

The Canadian central bank's decision to continue lowering rates came as consumer price inflation has declined significantly from 2.7% in June to 1.6% in September.

Top Movers: Seabridge Gold (SEA.TO) lost nearly 6.5%. Cameco Corporation (CCO.TO), Trisura Group (TSU.TO), Premium Brands Holdings Corporation (PBH.TO), TFI International (TFII.TO) and Shopify Inc (SHOP.TO) ended down by 2.3 to 4.5%.

Our Stance: Traders should closely monitor the immediate support level at 23,920; if the index can maintain its position above this threshold, it could set the stage for a rebound. On the other hand, a fall below this level may indicate the potential for a deeper correction, with subsequent support zones at 23,400 and 23,000 to keep an eye on.

Commodity Update: The U.S. dollar approached a three-month high against major currencies, driven by expectations of a slower pace of interest rate cuts by the Federal Reserve and rising speculation about a potential second Donald Trump presidency. In the commodities market, gold rose 0.23% to $2,735.70 per ounce, silver climbed 0.59% to $34.03 per ounce, and copper increased 0.63% to $9,570.00 per ton. Brent crude futures gained 1% to $75.72 a barrel amid heightened tensions between Israel and Iran. Meanwhile, oil prices fell on Wednesday due to higher-than-expected U.S. crude stockpiles, with upcoming business activity data closely watched.

Technical Update: The recent performance of the S&P/TSX Composite Index, which closed at 24,573.62 after a 0.58% decline, underscores the current market volatility. The basic materials sector’s notable drop of 1.75% has clearly impacted investor sentiment, yet the index remains comfortably above its 21-period Simple Moving Average (SMA), signaling that the short-term uptrend is still intact. Traders should closely monitor the immediate support level at 23,920; if the index can maintain its position above this threshold, it could set the stage for a rebound. On the other hand, a fall below this level may indicate the potential for a deeper correction, with subsequent support zones at 23,400 and 23,000 to keep an eye on. As we navigate these mixed signals, market participants are likely to adopt a cautious stance, weighing optimism against the possibility of increased volatility.