Canada’s stock market entered the midweek session on a firmer footing, as big-bank earnings and resilient commodity prices helped lift the S&P/TSX Composite index back toward record territory on Wednesday, December 3, 2025.
By mid‑morning in Toronto, the benchmark S&P/TSX Composite was trading just above the 31,100 mark, up roughly 0.3% from Tuesday’s close at 31,049.28, recouping part of the prior day’s modest pullback. [1]
Royal Bank of Canada and National Bank of Canada — both reporting stronger‑than‑expected fourth‑quarter results and dividend increases — were at the centre of today’s move, while steady gains in oil, copper and gold continued to support the resource‑heavy Canadian market. [2]
How the TSX Is Trading Today
A rebound after Tuesday’s “pause”
On Tuesday, December 2, the S&P/TSX Composite index finished at 31,049.28, down 52.50 points (‑0.17%), a mild step back after a powerful late‑November rally. [3]
Pre‑market commentary today characterised that move as a natural breather: most TSX sectors ended lower Tuesday, with basic materials leading the decline while technology shares held up better. Bank of Nova Scotia shares gained nearly 2.8% after beating profit expectations, showing that investors were already positioning ahead of this week’s bank earnings deluge. TS2 Tech
Even after Tuesday’s dip, the index remained close to record highs; a Reuters poll cited in pre‑open analysis noted that the TSX had gained almost 24% year‑to‑date by late November, its strongest annual performance since 2009. TS2 Tech+2Reuters+2
Wednesday’s session: banks and resources in focus
At the opening bell on Wednesday, the S&P/TSX Composite jumped about 0.4% to 31,178.34, according to a brief from Reuters. [4] Real‑time data from index providers later in the morning showed the benchmark hovering around 31,130–31,150, up roughly 0.3% on the day, keeping it within sight of recent record levels above 31,400. [5]
Early trading patterns suggest:
- Financials outperformed, led by Royal Bank of Canada (RY) and National Bank of Canada (NA) after both delivered robust Q4 earnings and dividend hikes. [6]
- Energy and materials names got support from firmer oil, copper and gold prices, a recurring theme in recent weeks as global investors lean back into cyclicals and real‑asset exposure. TS2 Tech+1
- Gains were partially tempered by fresh data showing Canada’s services sector slipping back into contraction in November, keeping a lid on more aggressive risk‑taking. [7]
In other words, the TSX’s early push higher is very much a “banks + commodities” story, set against a macro backdrop that still looks fragile beneath the surface.
Big Six Banks: RBC and National Bank Steal the Show
Royal Bank of Canada: record earnings, higher dividend, record stock price
Royal Bank of Canada kicked off the day with a blowout set of fiscal 2025 numbers:
- Full‑year net income came in around C$20.4 billion, up about 25% year‑over‑year, with diluted EPS similarly rising roughly 25%. [8]
- For Q4, adjusted net income rose about 25% to C$5.55 billion, with adjusted EPS of C$3.85, comfortably above analyst expectations around C$3.53 per share. [9]
- Capital markets profit surged by over 45%, thanks to stronger trading revenue and a pickup in merger‑and‑acquisition activity. Wealth management earnings grew by more than 30%, reflecting rising client assets and fees. [10]
Management signalled clear confidence in the outlook:
- Return on equity (ROE) guidance for fiscal 2026 was raised to above 17%, up from a previous 16% target. [11]
- The quarterly dividend was increased by about 6%, continuing RBC’s long history of returning cash to shareholders. [12]
Investors rewarded the news. RBC shares climbed as much as 1.9% in early trading, hitting a record intraday high around C$220. [13]
At the same time, the bank is not blind to risks. Reuters reports that loan‑loss provisions rose to roughly C$1 billion, reflecting still‑elevated credit risk in areas like consumer lending and commercial real estate, even if those charges remain manageable given the bank’s size. [14]
Overall, RBC’s report reinforced two themes that matter for the TSX:
- Canadian banks are leaning heavily on fee‑based businesses — capital markets, wealth and advisory — as loan growth slows. [15]
- Well‑capitalised lenders can simultaneously absorb higher credit costs and still raise dividends and medium‑term profit targets, which is supportive for the financials sector’s weight within the index. [16]
National Bank of Canada: wealth and capital markets carry the quarter
National Bank of Canada also delivered a solid Q4 and full‑year 2025 update:
- For Q4, reported net income rose to about C$1.06 billion, up from C$955 million a year earlier. [17]
- Adjusted profit reached roughly C$1.16 billion, or C$2.82 per share, compared with C$928 million or C$2.58 per share in the prior‑year quarter — well ahead of analyst estimates. [18]
- Capital markets earnings jumped around 41% to C$432 million, while the wealth management division’s revenue increased about 18% to C$258 million, underscoring the shift toward fee‑driven growth. [19]
On capital returns, National Bank’s board raised the quarterly common share dividend by 6 cents to C$1.24 per share, reinforcing its own growth‑and‑income story. [20]
Like RBC, National Bank is navigating:
- Slower loan growth, as concerns over consumer resilience, mortgage renewals and U.S.–Canada trade tensions weigh on demand for new credit. [21]
- An environment where capital markets and wealth management are increasingly critical for earnings momentum. [22]
With both banks surprising to the upside on earnings and dividends, financials remain a core pillar of today’s TSX strength, and their guidance will heavily shape how strategists think about Canadian equities heading into 2026.
Commodities, Enbridge Guidance and Stock‑Specific Movers
Firm oil, record‑high copper and strong gold underpin resource stocks
The global commodity backdrop remains conspicuously supportive for Canada:
- Copper futures are trading near US$5.37 (per pound equivalent), up roughly 2.5% on the day and near record highs. TS2 Tech+1
- Gold futures are holding just above US$4,230 an ounce, only a few percent below recent records. TS2 Tech+1
- WTI crude is around US$59–60 a barrel, up roughly 1–1.5%, while Brent crude sits above US$63 with similar gains. TS2 Tech+1
Given that energy and materials together make up roughly one‑third of TSX market capitalisation, this mix of solid oil prices and very strong metals prices remains a tailwind for Canadian resource names. TS2 Tech+1
Enbridge: 2026 guidance and another dividend increase
Pipeline giant Enbridge added to the day’s narrative with fresh 2026 financial guidance and yet another dividend increase: [23]
- The company forecast 2026 adjusted EBITDA between C$20.2 billion and C$20.8 billion and distributable cash flow (DCF) per share between C$5.70 and C$6.10, implying roughly 4% growth from the midpoint of its 2025 guidance. [24]
- Enbridge raised its common share dividend by 3% to C$0.97 per quarter (C$3.88 annualised) for 2026, marking its 31st consecutive annual dividend increase and reinforcing its status as a Canadian dividend stalwart. [25]
Management highlighted around C$8 billion of new projects entering service in 2026, spanning liquids pipelines, gas transmission, gas distribution and renewables — most underpinned by regulated or long‑term contracted frameworks. [26]
For income‑focused investors, these numbers support the thesis that midstream energy remains a source of relatively steady cash flows and dividend growth even in a choppy macro environment.
International Petroleum, PyroGenesis and Daura Gold: micro‑catalysts on the TSX and TSXV
Several smaller‑cap names also delivered market‑moving headlines:
- International Petroleum Corporation (IPCO) announced that the TSX has approved a renewed normal‑course issuer bid, allowing the company to repurchase up to 6.47 million shares (about 5.8% of outstanding, or 10% of its public float) between December 5, 2025 and December 4, 2026. The firm fully completed its previous buyback, purchasing over 7.4 million shares at a weighted average price of about C$20.10. [27]
- PyroGenesis Inc. (PYR) revealed a €815,000 (about C$1.32 million) contract with a European cement producer to supply a plasma torch system for electrifying a calcination furnace, part of a broader push to lower emissions in cement production. [28]
- On the TSX Venture Exchange, Daura Gold Corp. (DGC) granted 3,355,000 stock options to executives, directors and key consultants at an exercise price of C$0.35, equal to the prior day’s close. The options vest over time and expire in 2030, as the company continues advancing exploration projects in Peru’s Ancash region. [29]
Individually, these stories are small versus the big‑bank headlines, but together they illustrate the ongoing themes of share buybacks, energy transition technology and early‑stage mining exploration that often drive volatility in Canada’s mid‑ and small‑cap space.
Macro Backdrop: BoC on Hold, Growth Rebound Meets Services and Housing Weakness
Policy rate at 2.25% and an economy in transition
The Bank of Canada cut its policy rate to 2.25% on October 29, its second consecutive 25‑basis‑point reduction, and signalled that it is likely approaching the end of this easing cycle. [30]
Key elements of the macro backdrop that traders are digesting today:
- Q3 2025 real GDP grew at an annualised pace of about 2.6%, rebounding from a Q2 contraction and driven heavily by a jump in crude oil and bitumen exports alongside stronger government capital spending. TS2 Tech+1
- Domestic demand looks softer: business investment has been broadly flat and household consumption edged lower, while a flash estimate points to a 0.3% decline in GDP in October, raising questions about Q4 momentum. TS2 Tech+1
- Headline inflation eased to around 2.2% year‑over‑year in October, comfortably within the BoC’s 1–3% target band, even as core inflation indicators remain closer to the mid‑2% range. [31]
The BoC’s own October Monetary Policy Report projects that Canadian GDP growth will strengthen from roughly 0.75% in the second half of 2025, with annual growth averaging around 1.4% in 2026–27, while inflation gravitates back toward 2%. [32]
Private‑sector outlooks largely align: S&P Global Ratings recently reiterated a 1.4% GDP growth forecast for 2026, and mortgage‑rate strategists expect the BoC to hold its 2.25% policy rate at the December 10 decision, barring major surprises in upcoming data. [33]
RBC Economics, in its weekly preview, expects November employment data to show little net job growth and an unchanged unemployment rate, underlining that the labour market is stabilising rather than booming. [34]
Services PMI and housing data flash caution
Fresh data released today highlighted ongoing pockets of weakness in the Canadian economy:
- S&P Global’s Canada Services PMI dropped to 44.3 in November from 50.5 in October, its lowest reading since June and clearly in contraction territory (below 50). New business fell to 45.0, while the employment index slid to 47.1, its weakest level since mid‑2020, signalling job cuts in service industries. [35]
- The composite PMI, which blends manufacturing and services, also fell to 44.9, suggesting that overall private‑sector output contracted last month. [36]
On the housing front, Greater Toronto Area home sales fell 0.6% in November from October, reaching a five‑month low, while the home price index slipped 0.4% month‑over‑month and nearly 5.8% year‑on‑year. The Toronto Regional Real Estate Board cited ongoing uncertainty about long‑term employment prospects as a key factor, even with borrowing costs lower than a year ago. [37]
Put together, the data paint an uneven picture:
- External‑facing sectors and government spending are driving GDP, helped by high commodity prices and large projects. TS2 Tech+1
- Services, housing and consumer‑oriented activity remain under pressure, limiting how aggressively investors are willing to price in a sustained Canadian equity boom. [38]
TSX Outlook: What Strategists See for 2026
Despite today’s soft spots, market strategists remain cautiously constructive on Canadian stocks:
- A Reuters survey referenced in pre‑market coverage projects the S&P/TSX Composite could climb toward roughly 32,125 by the end of 2026, implying moderate upside from current levels after a big 2025 run. [39]
- RBC Wealth Management’s 2026 Canada outlook estimates that the TSX is trading around 15.9× forward earnings, above its historical average near 14.7× but still meaningfully cheaper than the U.S. S&P 500, leaving room for further gains if earnings keep delivering. TS2 Tech+1
- S&P Global Ratings likewise expects Canadian GDP growth to improve modestly in 2026, helped by stabilising trade and a gradual recovery in domestic demand. [40]
Strategists generally highlight three key supports for the TSX:
- Lower policy rates and a steeper yield curve, which help bank net interest margins and reduce refinancing stress for corporates and households. [41]
- Strong structural demand for energy and metals, especially copper and gold, amid ongoing infrastructure, defence and clean‑energy investment globally. TS2 Tech+1
- Attractive relative valuations compared with U.S. equities, particularly in financials, energy and certain value‑oriented sectors. TS2 Tech+2YCharts+2
But they also warn about:
- Elevated valuations versus Canada’s own history, which raise the bar for future earnings reports — exactly why today’s RBC and National Bank beats matter so much. TS2 Tech+2Reuters+2
- Downside risks from services contraction, housing softness and global trade tensions, as highlighted by the latest PMI data and Toronto housing numbers. [42]
In short, the baseline scenario is for modest TSX gains in 2026, driven by banks and resource stocks — but with higher day‑to‑day volatility and more sensitivity to macro headlines than in the earlier stages of 2025’s bull run.
What to Watch After Today’s Bell
Looking beyond this morning’s moves, here are key themes Canadian investors will be monitoring through the close and into the next sessions (information only, not investment advice):
- Follow‑through in big‑bank shares
- Do RBC and National Bank hold on to, or build on, their early gains as analysts digest guidance on ROE, dividends and credit quality? [43]
- Reaction to Enbridge’s 2026 outlook
- Income investors will be watching whether Enbridge’s updated EBITDA and DCF targets, plus its 31st dividend increase, attract fresh flows into pipelines and other yield‑focused names. [44]
- Commodity momentum and resource stocks
- If copper, gold and oil continue to trade near current levels, energy and mining shares could extend their relative outperformance — but any reversal in global risk sentiment or commodity prices would quickly feed through to the TSX. TS2 Tech+1
- Incoming economic data before the December 10 BoC decision
- Labour productivity numbers, the November jobs report and additional price data will all help determine whether the Bank of Canada can stay on hold at 2.25% or feels pressure to move again in early 2026. Bank of Canada+3TS2 Tech+3RBC+3
- Housing and services‑sector sentiment
- After today’s weak services PMI and Toronto home‑sales data, investors will be alert to any further evidence of slowing consumer or business demand — which would matter not only for banks but also for retailers, REITs and domestic cyclicals. [45]
As of late morning on December 3, 2025, the message from markets is that Canada’s stock market remains resilient, buoyed by record‑level bank profits and strong commodity prices, but it is also navigating a patchy domestic economy and lingering global uncertainty — a combination that argues for careful stock‑picking and close attention to macro signals in the sessions ahead.
References
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