The TSX Index is expected to open on a slight negative note

The S&P/TSX Composite Index is expected to open on a weaker note, following softness in the healthcare and financial sectors during the previous trading session.

Despite the anticipated pullback, the broader technical outlook remains constructive, with the index continuing to trade comfortably above its 21-day Simple Moving Average (SMA). This key trend indicator reinforces the prevailing bullish bias and suggests that buyers remain in control of the broader market direction. Momentum continues to favour the upside, with price action holding above important support levels and maintaining a positive medium-term outlook. The index is now approaching a key resistance zone near 35,100, which represents an important test of bullish momentum. A decisive breakout above this level could strengthen market sentiment, attract fresh buying interest, and potentially pave the way for a move towards the psychologically significant 35,400 level.

Global Macro Backdrop

Global markets are starting the week with a balanced but constructive tone.

• U.S. equity markets ended last week mixed as investors weighed resilient economic growth against expectations that the Federal Reserve will remain cautious before making additional interest-rate adjustments.
• Market participants continue to evaluate incoming inflation and employment data for clues about the timing of future monetary policy easing.
• European markets are trading modestly higher in early Monday action, supported by improving business sentiment and easing concerns over manufacturing activity.
• Asian markets closed mostly higher overnight, with gains in Japan and South Korea offsetting relatively subdued trading in mainland China as investors await further economic support measures.

Government bond yields remain relatively stable, helping reduce volatility across global equity markets.

Canadian Market Focus

The TSX enters the final days of June with several supportive themes.

• Quarter-end portfolio rebalancing may contribute to increased trading activity across major sectors.
• Investors continue monitoring Canada's inflation outlook and economic indicators for signals regarding the Bank of Canada's policy path during the second half of 2026.
• Resource stocks remain well supported by resilient commodity prices, while financials continue providing stability to the broader index.
• Markets are also watching corporate earnings guidance and capital spending trends as investors begin positioning for the upcoming earnings season.

Canada's commodity-heavy market continues to benefit from stronger resource prices relative to many global equity benchmarks. 

Commodity view — what will move the TSX

• Crude: Crude oil climbed to around $70 per barrel on Monday, recovering modestly from four-month lows after a series of tit-for-tat attacks between the US and Iran over the Strait of Hormuz. 
• Gold: Gold fell to around $4,050 an ounce on Monday, snapping a two-day rebound as renewed exchanges of attacks between the US and Iran over the Strait of Hormuz lifted oil prices and rekindled inflation concerns.
• Silver: Silver fell to around $58.5 an ounce on Monday, snapping a two-day rebound as renewed exchanges of attacks between the US and Iran over the Strait of Hormuz lifted oil prices and rekindled inflation concerns.
• Copper: Copper futures fell toward $6.1 per pound on Monday, snapping a two-day rebound as expectations of tighter US Federal Reserve policy continued to weigh on the outlook for industrial metals demand.

Forex Watch

The Canadian dollar (CAD) is trading relatively steady against the U.S. dollar.

• Firm oil prices continue providing underlying support for the loonie.
• Currency markets remain focused on the policy outlook for both the Federal Reserve and the Bank of Canada.
• Stable foreign-exchange conditions are helping reduce uncertainty for Canadian exporters.

What to watch today

Investors will be watching:

• Crude oil and natural gas price movements
• Gold and copper market trends
• U.S. Treasury yields
• Inflation expectations and central bank commentary
• Quarter-end institutional portfolio rebalancing
• Global manufacturing and economic growth indicators
• Geopolitical developments affecting commodity markets

Market Outlook

Although market sentiment has improved, investors are expected to remain selective as they position for the second half of the year. Inflation data, central bank signals, and commodity-price movements will remain the primary catalysts shaping short-term direction across Canadian equities.

Final Takeaway

The TSX begins the week supported by firm oil prices, while quarter-end portfolio adjustments could contribute to elevated trading volumes. As investors look ahead to the second half of 2026, commodity trends, monetary policy expectations, and global economic data will continue to influence sector leadership and overall market sentiment. Canada's resource-rich market remains well positioned to benefit if commodity prices stay resilient and global growth expectations remain constructive.