The TSX Index is expected to open on a negative note

The S&P/TSX Composite index is expected to open with a cautious-to-positive bias on Friday as investors wrap up the week monitoring fresh macroeconomic developments, Commodity price action, and shifting global interest-rate expectations.

From a technical perspective, the index continues to trade above its 21-day Simple Moving Average (SMA), which remains an important dynamic support level and supports the broader bullish trend structure. Momentum indicators also remain constructive, with the 14-day Relative Strength Index (RSI) near 57.66, indicating healthy bullish momentum while still leaving room for additional upside before reaching overbought territory. Immediate support is seen around the 34,400 level, and a sustained move below this zone could trigger short-term consolidation toward 34,100. On the upside, a decisive breakout above the 34,600-resistance area may reinforce bullish sentiment and potentially pave the way for a move toward the 34,900 mark in the near term.

Global Market Sentiment

Global markets are ending the week on a relatively stable footing as investors continue assessing the balance between slowing economic momentum and persistent Inflation pressures. Recent economic releases from major economies have reinforced expectations that central banks may remain cautious about near-term policy easing despite softer growth signals.

In North America, traders remain focused on upcoming inflation and labour market data, which could significantly influence the outlook for both the Federal Reserve and the Bank of Canada. Investors are also watching consumer spending trends and Business activity indicators for signs of economic resilience.

Geopolitical developments and global trade uncertainty continue to contribute to selective market Volatility, particularly across commodity-linked sectors.

Commodity view — what will move the TSX

• Crude: WTI crude futures fell below $88 per barrel on Friday and remained on track for a sharp monthly loss after reports indicated that the US and Iran had tentatively agreed to extend their ceasefire by 60 days and possibly permit unrestricted shipping through the Strait of Hormuz.
• Gold: Gold steadied near $4,500 an ounce on Friday after recovering in the previous session, as reports of a preliminary agreement between the US and Iran eased concerns over inflation and interest rates.
• Silver: Silver steadied near $76 an ounce on Friday after recovering in the previous session, as reports of a preliminary agreement between the US and Iran eased concerns over inflation and interest rates.
• Copper: Copper futures held steady near $6.4 per pound on Friday and were on track to register a second straight monthly advance, underpinned by renewed optimism over Demand linked to the global artificial intelligence expansion and the rapid build-out of Data Center infrastructure.

Sector watch

Energy: Likely to remain the key TSX driver, especially if oil prices extend gains.

Materials: Gold miners may continue attracting defensive inflows, while copper and diversified miners react to global growth signals.

Financials: Canadian banks remain sensitive to bond yields and economic outlook expectations.

Industrials: Transportation and infrastructure-related names may benefit from improving global growth sentiment.

Technology: Rate-sensitive technology shares are expected to follow broader U.S. market direction and Treasury Yield movements. 

Currency Movements

The Canadian dollar is expected to remain closely correlated with Crude Oil prices and broader U.S. dollar strength. Commodity-driven support for the loonie could help stabilize investor sentiment in Canadian equities.

Canadian bond yields are likely to track U.S. Treasury movements, with any sharp changes in rate expectations potentially impacting financials, utilities, and real estate stocks. 

What to watch today

• Opening moves in crude oil, gold, and copper
• Canadian dollar movement versus the U.S. dollar
• Canada and U.S. Bond Yield direction
• Any fresh macroeconomic data releases
• Corporate updates from major TSX energy and Mining companies

Outlook

TSX expected to open cautiously higher as commodity strength and stable global sentiment support energy and materials shares.

Bottom Line: Commodity prices and interest-rate expectations are likely to remain the primary drivers for the TSX on May 29, with energy, materials, and financials expected to dominate market direction.