The sell-off on Bay Street

Image Source : Krish Capital Pty Ltd

Index Update:  The sell-off on Bay Street came amid concerns about a global trade war after President Donald Trump outlined his plan to impose sweeping tariffs on U.S. trade partners. The benchmark S&P/TSX Composite Index plunged early in the session and remained sharply lower throughout the day before closing down 971.41 points or 3.8 percent at 24,335.77.

Macro Update: Trump's "reciprocal tariff" plan calls for a baseline 10 percent tariff to be imposed on all U.S. imports except those compliant with the United States-Mexico-Canada Agreement.

The Canadian domestic data showcased a 5.5% decline in merchandise exports in February and a shrinking trade balance that shifted from a $3.1 billion surplus in January to a $1.5 billion deficit.

Top Losers: Notably, tech, financial, and energy producers have been hit hard, with Shopify tumbling 19.6%, Brookfield off 8.9%, and Imperial Oil dropping 8.1%, leading their respective sector's decline.

Our Stance: The index continues to trade below its 21-period Simple Moving Average (SMA), reinforcing the prevailing downtrend and signaling persistent selling pressure. The key support level to watch is 24,100, which aligns with a critical horizontal trendline. Holding this level could provide a base for stabilization and a potential recovery. However, a decisive break below it could trigger further losses, with downside targets at 23,700 and 23,500.

Commodity Update: The U.S. dollar remained under pressure against the yen, which hovered near a six-month high, as markets assessed the impact of President Donald Trump’s broad new tariffs. The dollar steadied after rebounding from six-month lows against the euro and sterling, with attention now on the U.S. payrolls report for economic insights and monetary policy direction. In commodities, gold slipped 0.21% to $3,115.20, silver dropped 1.27% to $31.56, and copper declined 0.75% to $9,288.75. Brent oil fell 0.40% to $69.84 per barrel after OPEC+ accelerated output increases, deepening losses from Trump’s trade measures.

Technical Update: On Thursday, the S&P/TSX Composite Index plunged 971.41 points (-3.84%) to close at 24,335.77, pressured mainly by a sharp 8.90% decline in the technology sector, which weighed heavily on overall market sentiment. The index continues to trade below its 21-period Simple Moving Average (SMA), reinforcing the prevailing downtrend and signaling persistent selling pressure. Momentum indicators paint a cautious picture. The Relative Strength Index (RSI) sits at 40.32, nearing oversold territory. While this may open the door for a short-term rebound, downside risks remain elevated. The key support level to watch is 24,100, which aligns with a critical horizontal trendline. Holding this level could provide a base for stabilization and a potential recovery. However, a decisive break below it could trigger further losses, with downside targets at 23,700 and 23,500. Market sentiment remains fragile as investors closely track macroeconomic data and sector-specific developments for clues on future direction.