Canada Stock Market Today: TSX Climbs on Oil Rally and Bank Earnings After the Bell (Dec. 3, 2025)

Canada’s stock market finished solidly higher on Wednesday, December 3, 2025, as energy names and big banks pulled the S&P/TSX Composite Index out of a brief two‑day slump. After the closing bell, the benchmark index stood at 31,160.54, up 111.26 points (about 0.36%) on the day, according to YCharts and exchange data. ^[1]

The move tracked a broader risk‑on tone: U.S. stocks also advanced as economic data kept expectations alive for a near‑term Federal Reserve rate cut, helping global equities stabilize after recent jitters around AI spending and tech valuations. ^[2]

Quick takeaways for investors

TSX snaps losing streak: S&P/TSX Composite closes near 31,160, up 0.36%, after two sessions of pullback from last week’s record high. ^[3]
Energy leads the charge: The energy sector gained about 2% as crude oil pushed back toward US$59 a barrel following geopolitical tensions around Ukraine and sanctions on Russian supply. ^[4]
Banks keep beating: Royal Bank of Canada (TSX:RY) and National Bank of Canada (TSX:NA) both topped fourth‑quarter profit forecasts, with RBC stock hitting a fresh record high and both lenders boosting dividends. ^[5]
Macro data mixed: Canadian services activity slid back into contraction, Toronto home sales hit a five‑month low, and yet productivity and the loonie improved—underlining a market that’s strong even as the domestic economy looks soft. ^[6]
Outlook still constructive: Strategists polled by Reuters see the TSX rising to around 32,125 by end‑2026 and nearly 33,925 by mid‑2027, but most also flag the risk of a corrective pullback in the next few months. ^[7]

Let’s unpack what moved Bay Street today, and what that might mean heading into the rest of December.

TSX today: index regains momentum near record highs

After a choppy start to the week, the S&P/TSX Composite Index reclaimed ground on Wednesday, gaining 111 points and roughly 0.4% on the session. ^[8]

A midday update from Canadian Press showed the index already up just over 100 points around late morning, supported by energy and base‑metal names, and it held those gains through the close to end near 31,160, according to exchange and YCharts data. ^[9]

From a longer‑term lens, the TSX has quietly put together an excellent year:

YCharts data show the index delivering roughly 24.7% total return over the past 12 months and about 28.6% year‑to‑date as of December 3, putting Canada among the better‑performing major developed markets in 2025. ^[10]

RBC Wealth Management’s latest “Global Insight 2026 Outlook: Canada” notes that this performance has been powered by record‑high gold prices, stronger sentiment toward domestic lenders, and the TSX’s heavy weighting in energy and materials. ^[11]

Energy and commodities power the advance

Oil bounce lifts Canadian energy shares

Energy stocks were the standout driver of Wednesday’s rally. Reuters reported that the TSX energy sub‑index climbed about 2% as oil prices firmed; January crude settled around US$58.95–59.15 a barrel, up roughly 0.5–0.9% on the day, after U.S.–Russia talks on Ukraine failed to yield progress that might loosen sanctions on Moscow’s oil sector. ^[12]

For Canada’s resource‑heavy benchmark, that move matters. Energy and materials together make up about 32% of the TSX, according to a recent Reuters poll and RBC sector breakdowns, so even modest commodity moves can have an outsized impact on the index. ^[13]

Gold, metals and the AI data‑center story

Beyond crude, precious and base metals remain a key structural theme:

Gold is still trading well above US$4,200 an ounce after a blistering run driven by Fed‑cut expectations and weak major currencies. ^[14]
Copper prices remain elevated, with strategists tying part of the demand story to global AI infrastructure build‑out—data centers, power grids and networking gear that are extremely metals‑intensive. ^[15]

As one Toronto portfolio manager told Reuters, AI‑linked infrastructure demand is increasingly viewed as a positive for commodity‑rich markets like the TSX, which hosts many of the world’s largest base‑metal miners. ^[16]

Big banks: RBC and National Bank headline another strong earnings day

If energy was the macro engine, banks were the stock‑specific story.

Royal Bank of Canada: record share price, raised targets

Royal Bank of Canada (RBC, TSX:RY), the country’s largest lender and biggest TSX constituent, beat fourth‑quarter earnings expectations thanks to a powerful showing in capital markets and wealth management: ^[17]

Adjusted net income rose about 25% to C$5.55 billion, or C$3.85 per share, versus analyst estimates near C$3.53.
Capital markets profit jumped over 45%, helped by stronger trading and a pickup in mergers and acquisitions.
Wealth‑management earnings climbed more than 30% year‑on‑year.

RBC responded by:

Raising its 2026 return‑on‑equity (ROE) target to above 17%, up from a prior 16% goal.
Increasing its quarterly dividend by 6%, signalling continued confidence in its earnings power despite a soft domestic economy. ^[18]

The stock hit a record high around C$220 intraday, and Reuters noted it ended the Toronto session up roughly 1–2%, contributing meaningfully to the financial sector’s modest gain. ^[19]

National Bank: strong results, cautious price action

National Bank of Canada (TSX:NA) also reported better‑than‑expected Q4 profit, powered by its own capital markets and wealth management franchises: ^[20]

Adjusted profit climbed to about C$1.16 billion, or C$2.82 per share, up from C$2.58 a year earlier.
Capital markets profit increased roughly 41% to C$432 million, while wealth‑management revenue grew about 18%.

Despite that, National Bank’s shares closed down around 1.5–1.6%, as some investors locked in profits after a strong year and weighed the bank’s heavy exposure to the still‑fragile domestic economy. ^[21]

Scotiabank set the tone on Tuesday

The latest results extend a pattern:

On Tuesday, Bank of Nova Scotia (Scotiabank, TSX:BNS) kicked off the Big Six reporting season with a fourth‑quarter profit increase driven by higher net interest income and firm capital‑markets performance, also beating analyst forecasts. ^[22]

Taken together, these updates reinforce a theme: loan growth is sluggish amid weak housing and cautious consumers, but the banks are leaning on fee‑rich businesses—capital markets, wealth management, and cross‑border expansion—to support earnings and dividends. ^[23]

Macro backdrop: strong market, soft economy

One of the most important subplots for Canada right now is the disconnect between buoyant asset prices and a still‑fragile real economy. Today’s data gave investors plenty to chew on.

Services PMI slips back into contraction

Fresh S&P Global data showed Canada’s services PMI falling to 44.3 in November, down sharply from 50.5 in October, marking the sector’s steepest contraction in five months. ^[24]

Key details from the survey, as summarized by Reuters:

New business dropped, with that index around 45.0, reflecting weaker demand.
Employment in services slid to about 47.1, its lowest level since mid‑2020.
The Composite PMI Output Index—which blends manufacturing and services—fell to roughly 44.9, underlining broad‑based weakness as 2025 winds down. ^[25]

In short: the private sector is still dealing with trade‑related uncertainty and tariff pressures, even as markets celebrate rate cuts and fiscal spending plans.

Toronto housing: five‑month low in sales

The housing picture didn’t brighten things much:

Greater Toronto Area home sales slipped 0.6% month‑over‑month in November, hitting the lowest seasonally adjusted level since June, with about 5,620 units changing hands.
The local home‑price index fell 0.4% on the month to roughly C$971,100, and was down 5.8% from a year earlier; sales volumes dropped nearly 16% year‑on‑year. ^[26]

The Toronto Regional Real Estate Board pointed to an uncertain employment outlook as a key factor keeping many would‑be buyers on the sidelines, even as borrowing costs have come down from their peaks. ^[27]

Bank of Canada: on hold at 2.25%

Helping to offset the weak data is a significantly easier monetary stance:

The Bank of Canada sliced its key overnight rate to 2.25% at the October 29 meeting, the second consecutive 25‑basis‑point cut and the lowest level in roughly three years. ^[28]
The central bank’s latest Monetary Policy Report highlights ongoing pressure from tariffs, trade frictions and soft exports, with growth expected to stay subdued in 2025–2026 before gradually firming. ^[29]

RBC Wealth Management notes that the overnight rate is now at the lower end of the Bank’s estimated “neutral” range, and that policymakers appear inclined to pause further cuts unless the labour market or growth deteriorate more significantly. ^[30]

Loonie and bonds: currency firmer as productivity surprises

The foreign‑exchange and bond markets also reflected today’s cross‑currents.

Canadian dollar edges higher

Reuters reported that the Canadian dollar strengthened about 0.2% to roughly 1.3945 per U.S. dollar (around 71.7 U.S. cents), supported by: ^[31]

Higher oil prices; and
A 0.9% rebound in Q3 labour productivity, reversing a 1% decline in the prior quarter and marking the sixth increase in eight quarters. ^[32]

At the same time, Canadian bond yields eased, with the 10‑year Government of Canada yield slipping to around 3.22%, in step with U.S. Treasuries as traders priced in a higher likelihood of a Fed cut at the upcoming December 9–10 meeting. ^[33]

Global context: Fed and AI worries

South of the border, U.S. data showed private payrolls posting their largest decline in over two and a half years, while services activity held steady but with sluggish new orders. ^[34]

That mix—cooler labour data but no outright collapse in activity—has:

Pushed U.S. yields lower,
Lifted equity indexes, and
Reinvigorated rate‑cut expectations for the Federal Reserve, which in turn supports risk assets globally, including the TSX. ^[35]

At the same time, investors are still digesting how massive AI‑related capex will translate into long‑term profit growth for U.S. tech giants. Recent “AI wobble” episodes have tended to hit Wall Street harder than Bay Street because the TSX has less tech weight and more commodities, a sector mix that offered some insulation in today’s risk‑on rebound. ^[36]

Valuations and forecasts: how much upside is left for the TSX?

With the TSX hovering just below record highs, the big question is how much room is left to run.

Strategists’ base case: new highs, but a bumpy path

A late‑November Reuters poll of 20 equity strategists and portfolio managers found that: ^[37]

The median forecast calls for the S&P/TSX Composite to reach around 32,125 by the end of 2026, roughly 5% above late‑November levels, and
Climb further to about 33,925 by mid‑2027, implying around 11% upside over that horizon.

However, 11 of 15 analysts in the same survey also expect a market correction within the next three months, citing elevated valuations and the possibility that gold’s extraordinary rally may cool.

RBC on valuations: not cheap, but cheaper than the U.S.

RBC’s 2026 Canada outlook offers some valuation context: ^[38]

The TSX is trading at roughly 15.9x price‑to‑earnings, modestly above its long‑term average of 14.7x,
But still well below the S&P 500, which RBC pegs at about 21.3x versus a long‑run average closer to 16.6x.

RBC argues that:

This valuation gap versus the U.S. leaves some room for Canadian equities to grind higher, especially if resource and financial earnings keep improving.
At the same time, the premium to TSX history raises the bar for earnings delivery, making the market more vulnerable to disappointments in data or policy.

Their tactical stance emphasizes:

“Quality” stocks with strong balance sheets and resilient earnings, and
Adding a bit more duration in fixed income via longer‑dated government bonds, rather than reaching for extra credit risk in corporate bonds, where spreads remain tight. ^[39]

What to watch for next

Looking beyond today’s close, here are the key catalysts that could shape the Canada stock market over the coming days and weeks:

November Canadian jobs report
– Consensus expects a small net job loss and a tick up in unemployment toward 7%, which would test the Bank of Canada’s resolve to keep its policy rate on hold at 2.25%. ^[40]
Further read‑through from bank earnings calls
– Management commentary from RBC, National Bank and Scotiabank on credit quality, housing stress, and capital‑allocation plans will be key for financials, the TSX’s largest sector. ^[41]
Commodity prices and geopolitical developments
– Oil remains highly sensitive to the stalled U.S.–Russia talks over Ukraine and any new sanctions headlines, while silver and gold near record levels could influence both materials stocks and inflation expectations. ^[42]
U.S. Fed meeting and global risk sentiment
– A widely anticipated Fed rate cut next week could extend the tailwind for global equities; a surprise pause or hawkish tone could do the opposite. The TSX, with its pro‑cyclical tilt, typically reacts strongly to shifts in U.S. policy expectations. ^[43]
Incoming Canadian data on inflation and business outlook
– Updates to CPI, PMIs, and the Bank of Canada’s Business Outlook Survey will help investors gauge whether today’s weak services PMI and soft housing numbers are a blip or part of a deeper slowdown. ^[44]

Bottom line

Canada’s stock market today looks strong on the surface—buoyed by oil, gold and bank earnings—but the under‑the‑hood data still point to a fragile, tariff‑hit economy with pockets of stress in services and housing.

For now, investors seem comfortable betting that:

Rate cuts already delivered by the Bank of Canada,
Ongoing fiscal stimulus and infrastructure plans, and
A supportive global risk backdrop

will keep the TSX grinding higher into 2026, even if the path involves plenty of volatility and at least one correction along the way. ^[45]

As always, this article is for informational purposes only and does not constitute investment advice. Before making any investment decisions, consider your own risk tolerance and speak with a qualified financial advisor.