Canadian stocks moved higher during trading on Tuesday

Image Source : Krish Capital Pty Ltd

Index Update: The S&P/TSX Composite Index added 0.75% to close at 26,269.00 on Tuesday, a fresh record. This rise was fueled by a robust performance on Wall Street and a hopeful outlook for Toronto's dominant financial industry. Stocks in more speculative sectors continued their upward trend as news of delayed tariffs against the EU by US President Trump eased concerns about a trade dispute.

Macro Update: Despite signs of improving economic sentiment and progress in trade talks, markets stayed cautious. The Fed’s preferred inflation gauge, the core PCE index, is due on Friday. Fed officials, including New York Fed President John Williams, have stressed the need to act decisively if inflation strays from target. The Fed has kept interest rates at 4.25%-4.50% since December, balancing inflation control with ongoing market uncertainty, partly fueled by President Trump’s unpredictable trade stance.

Top Movers and Losers: Shopify rose nearly 3% to set the pace for tech shares. On the other hand, gold miners edged lower, with Agnico Eagle dropping 0.6% due to lower demand for safety.

Our Stance: From a technical standpoint, the index remains in a bullish formation, trading well above its 21-period Simple Moving Average (SMA) a sign of sustained upward momentum. The Relative Strength Index (RSI) stands at 72.23, indicating strong market momentum but also signaling the index is nearing overbought territory, where some caution may be warranted. At present, the index is testing key support around 25,900. Holding this level is critical to preserving the current uptrend.

Commodity Update: The dollar held firm on Wednesday as upbeat U.S. economic data and expectations for strong tech earnings lifted sentiment. Easing trade tensions between the U.S. and Europe and calmer global bond markets added to the optimism. U.S. consumer confidence exceeded forecasts ahead of key jobs data. Gold rose 0.01% to $3,328.35, silver gained 0.33%, copper dipped 0.20%, and Brent crude increased 0.73% amid tighter Venezuelan export restrictions.

Technical Update: The S&P/TSX Composite Index posted a strong performance on Tuesday, climbing 195.87 points (+0.75%) to close at 26,269.00. This advance reflects continued positive investor sentiment and healthy trading volumes, with the healthcare sector leading gains by rising 2.35%. From a technical standpoint, the index remains in a bullish formation, trading well above its 21-period Simple Moving Average (SMA) a sign of sustained upward momentum. The Relative Strength Index (RSI) stands at 72.23, indicating strong market momentum but also signaling the index is nearing overbought territory, where some caution may be warranted. At present, the index is testing key support around 25,900. Holding this level is critical to preserving the current uptrend. A decisive break below it could open the door to a deeper pullback, with additional support levels at 25,600 and 25,400 acting as potential safety nets.