Toronto’s stock market kicked off December on a cautious note. After notching a record high and its strongest month of 2025 in November, the S&P/TSX Composite Index slipped on Monday as investors locked in profits, digested weaker manufacturing data, and braced for a packed week of bank earnings and central‑bank decisions. [1]
By late morning, the TSX was trading roughly 0.3–0.5% lower, hovering just below the 31,300 level and down more than 150 points at one stage, with technology and financial stocks leading losses. [2]
Market snapshot: Canada stock market today
- Index level (intraday, Dec. 1, 2025): Just under 31,300, down about 0.3–0.5% from Friday’s close
- Friday’s close (Nov. 28): Around 31,383, a record high and a gain of roughly 3.7–3.8% for November [3]
- Year to date: Canadian stocks are up well over 20% in 2025, putting the TSX on track for its strongest annual performance since 2009. [4]
- Trend: Monday’s drop follows seven straight months of gains, a streak not seen since 2021. [5]
In other words, Canada’s stock market today is cooling off after a powerful rally, rather than reversing the broader uptrend.
Why the TSX is down today
1. A natural pause after a record November
The TSX has been one of the quiet outperformers of 2025. A mix of energy, materials, and bank stocks has benefited from high commodity prices, an improving outlook for trade, and expectations of lower interest rates. [6]
That momentum culminated on Friday, when the index climbed about 0.6% to a record close near 31,383, capping a roughly 3.7–3.8% gain for November. [7]
On Monday, investors simply took a breather:
- Reuters reported the TSX was down around 0.3% mid‑morning, having slipped from its record as traders reassessed risk after November’s surge. [8]
- TradingView data similarly showed the index trading just below 31,300, with weakness concentrated in growth sectors. [9]
After such a strong run, a modest pullback is more profit‑taking than panic.
2. Global risk‑off mood and Fed uncertainty
The Canadian market is also being pulled lower by a broader global cooldown:
- Global stocks fell and U.S. Treasury yields rose on Monday as investors paused after a five‑day winning streak and looked ahead to key U.S. data that will shape expectations for Federal Reserve rate cuts. [10]
- A sharp drop in Bitcoin — down around 7% and dragging crypto‑linked equities globally — added to risk aversion, putting extra pressure on tech names in Canada. [11]
At the same time, bond markets are increasingly convinced the Fed will cut rates in December. One widely cited gauge shows markets pricing in nearly an 88% probability of a 25‑basis‑point cut at next week’s U.S. central‑bank meeting, according to CME FedWatch figures referenced by Reuters. [12]
Rate cuts are usually supportive for equities over the medium term, but in the short run they can spark volatility as investors reshuffle positions across currencies, commodities, and yield‑sensitive sectors.
3. Bank of Canada in “wait‑and‑see” mode
Domestically, the Bank of Canada (BoC) has already shifted to a more accommodative stance:
- The BoC cut its policy rate to 2.25% on October 29, its second consecutive 25‑basis‑point reduction after a move in September. [13]
- Policymakers describe 2.25% as near the lower end of the “neutral” range, signalling that further cuts are unlikely without clear downside shocks to growth or inflation. [14]
In its October Monetary Policy Report, the BoC said the economy is adjusting to higher trade barriers and weaker export demand, with overall inflation hovering around 2% and underlying inflation closer to 2.5%. [15]
Looking ahead:
- RBC Economics expects November employment to be essentially flat and the jobless rate to hold at 6.9%, about one percentage point above what they consider a “normal” level. [16]
- That jobs report, due Friday, will be the last major data release before the BoC’s December 10 rate decision, making it a critical catalyst for Canadian markets. [17]
For equity investors, a central bank that has moved from aggressive cutting to cautious watching can be a double‑edged sword: supportive for valuations, but also a reminder that growth remains fragile.
Sector breakdown: What’s moving on the TSX today
Technology: leading the decline
The technology sector is the main drag on the TSX today:
- Reuters notes that tech shares were down more than 3%, with crypto‑linked miner Bitfarms dropping around 6% in sympathy with Bitcoin’s slide. [18]
- TradingView highlights additional pressure from large‑cap names: Shopify down over 4%, Constellation Software off roughly 2%, and Celestica tumbling more than 5%, placing it near the bottom of the index. [19]
These moves mark a reversal from earlier in the year, when information technology was one of the best‑performing groups within Canadian equities. [20]
Financials: big banks in focus before earnings
Canada’s heavyweight financial sector, which makes up nearly a third of the TSX, is also trading in the red today. [21]
The weakness comes just as the Big Six banks begin reporting fourth‑quarter results this week:
- Scotiabank kicks things off on Tuesday, followed by RBC, TD, BMO, CIBC, and National Bank later in the week. [22]
- A Reuters survey of analysts suggests net income could grow between roughly 3.5% and 42% year‑on‑year in the quarter, helped by strong performance in capital markets and wealth management. [23]
- However, the sector has already rallied about 32% year‑to‑date and now trades at nearly 13 times forward earnings, more than 20% above its 10‑year average, leaving little room for disappointment. [24]
Investors are especially focused on:
- Loan‑loss provisions and credit quality, particularly in commercial real estate and non‑bank financial exposure
- U.S. operations, which remain key growth drivers for banks like BMO and TD
- Guidance for fiscal 2026, given an environment of slower growth but lower rates
With valuations stretched, even solid results could trigger short‑term volatility in Canadian bank stocks.
Energy and materials: commodities offer support
Not everything on the TSX is under pressure:
- Energy producers are providing a partial cushion as oil prices trade more than 1% higher, helping the sector outperform on a down day for broader equities. [25]
- Gold and silver are also in focus. Spot gold is up around 0.5%, hitting multi‑week highs, while silver has pushed into record territory, according to early‑morning commodity quotes. [26]
One of the biggest corporate stories today is Barrick Mining’s decision to evaluate an IPO of a new company holding its North American gold assets:
- The new entity would bundle core operations such as Nevada Gold Mines and other major projects, with Barrick planning to retain a controlling stake. [27]
- Barrick’s Toronto‑listed shares rose roughly 2–3% on the news, helping lift the materials group and underlining how record‑high precious‑metal prices are reshaping corporate strategy. [28]
For investors, these moves highlight how the resource‑heavy composition of the TSX — energy and materials together account for about 32% of the index — continues to be a key differentiator versus the more tech‑heavy U.S. market. [29]
Macro backdrop: Canada’s economy and PMI data
Monday’s selling also coincides with fresh signs of ongoing softness in the real economy:
- Canada’s manufacturing PMI slipped to about 48.4 in November, down from 49.6 in October, marking a tenth straight month of contraction in the factory sector. [30]
RBC Economics notes that while employment has grown strongly over the past year, the unemployment rate remains elevated, and trade‑exposed areas like manufacturing and transportation have lagged the broader jobs recovery. [31]
The big question for investors is whether rate cuts can support growth without reigniting inflation. So far, the BoC’s October projections and subsequent data suggest:
- Inflation is roughly at target but underlying price pressures are still slightly above 2%
- Growth is expected to gradually improve into 2026, helped by easier policy and potential relief on trade tensions, but risks from tariffs and a pending USMCA renegotiation remain on the radar. [32]
Strategy views and forecasts for Canadian stocks
Street forecasts: New highs, but with more volatility
A recent Reuters poll of 20 strategists and portfolio managers points to a cautiously optimistic outlook:
- The S&P/TSX Composite is projected to rise nearly 5% to around 32,125 by the end of 2026, eclipsing current record highs.
- By mid‑2027, the index could reach close to 33,925, implying an additional 10–11% upside from late‑2025 levels. [33]
The bullish case rests on:
- Lower interest rates from both the BoC and the Fed, boosting liquidity and valuations
- An expected improvement in trade clarity, particularly around U.S. tariffs on Canadian exports
- Continued global demand for Canadian energy and critical minerals, driven by data‑centre build‑outs and AI‑related infrastructure. [34]
But strategists also warn that near‑term corrections are likely after this year’s outsized gains and valuation rerating, especially if gold prices or bank earnings disappoint. [35]
Asset‑manager perspectives: Canada’s quiet outperformance
Several major investment firms have flagged Canadian equities as relative winners in 2025:
- RBC Global Asset Management notes that the TSX, emerging markets, and international developed marketshave collectively outpaced the S&P 500 by roughly 10 percentage points so far this year, helped by more reasonable valuations and sector mix. [36]
- RBC and other Canadian asset managers expect modest acceleration in GDP growth into 2026, though they caution that productivity, trade policy, and demographics will dominate the medium‑term story. [37]
Taken together, the consensus is that Canada’s stock market still has room to make new highs, but that returns will likely be “grind‑ier” from here, with higher day‑to‑day volatility than investors enjoyed in 2025’s strong uptrend.
What investors should watch for the rest of the week
For anyone following Canada’s stock market today and beyond, several catalysts could shift sentiment quickly:
- Big bank earnings (this week)
- Scotiabank on Tuesday, followed by RBC, TD, BMO, CIBC, and National Bank later in the week.
- Focus points: loan‑loss provisions, U.S. exposure, and 2026 guidance — especially with bank stocks trading above long‑term valuation averages. [38]
- November jobs report (Friday)
- RBC expects flat employment and an unchanged 6.9% unemployment rate. A surprisingly strong or weak print could influence BoC expectations and bond yields, with knock‑on effects for rate‑sensitive sectors like banks, REITs, and utilities. [39]
- Bank of Canada decision (Dec. 10)
- Markets currently assume the BoC will hold at 2.25%, but the tone of its statement and press conference will be scrutinized for clues about whether more cuts are possible in 2026. [40]
- U.S. Federal Reserve meeting (Dec. 9–10)
- A December rate cut is now widely expected; any surprise decision or guidance could impact the loonie, commodity prices, and cross‑border capital flows that influence the TSX. [41]
- Commodity and crypto volatility
- Oil, gold, silver, and Bitcoin are all moving sharply; as today’s trading shows, swings in these markets can quickly reprice tech, mining, and energy stocks on the TSX. [42]
Key takeaways for investors
- Short‑term: The Canada stock market today is in a healthy consolidation after a record‑setting November. Profit‑taking in tech and banks is driving modest losses, while energy and gold names are cushioning the downside.
- Medium‑term: Lower North American interest rates, a softer but stable domestic economy, and strong global demand for resources support the case for further TSX gains into 2026, albeit with bumpier trading conditions. [43]
- Risks: Over‑extended valuations in bank stocks, potential disappointments in earnings or gold prices, and ongoing trade and tariff uncertainties could spur sharper pullbacks. [44]
As always, investors should match any exposure to Canadian stocks — whether through individual names or TSX‑tracking ETFs — to their risk tolerance, time horizon, and diversification needs. Today’s pullback is a reminder that even in a strong bull market, volatility never fully disappears.
References
1. www.reuters.com, 2. www.reuters.com, 3. tradingeconomics.com, 4. www.reuters.com, 5. www.reuters.com, 6. www.reuters.com, 7. tradingeconomics.com, 8. www.reuters.com, 9. www.tradingview.com, 10. www.marketscreener.com, 11. www.swissinfo.ch, 12. www.reuters.com, 13. www.bankofcanada.ca, 14. www.bankofcanada.ca, 15. www.bankofcanada.ca, 16. www.rbc.com, 17. www.rbc.com, 18. www.reuters.com, 19. www.tradingview.com, 20. www.edwardjones.ca, 21. www.reuters.com, 22. www.reuters.com, 23. www.reuters.com, 24. www.reuters.com, 25. www.channelnewsasia.com, 26. www.investing.com, 27. www.barrick.com, 28. www.reuters.com, 29. www.reuters.com, 30. www.tradingview.com, 31. www.rbc.com, 32. www.bankofcanada.ca, 33. www.reuters.com, 34. www.reuters.com, 35. www.reuters.com, 36. www.rbcgam.com, 37. ca.rbcwealthmanagement.com, 38. www.reuters.com, 39. www.rbc.com, 40. www.bankofcanada.ca, 41. www.reuters.com, 42. www.investing.com, 43. www.reuters.com, 44. www.reuters.com
