Canada’s stock market spent Wednesday grinding higher, with the S&P/TSX Composite hovering in the low 31,000s by early–mid‑afternoon as traders digested a double‑header of central‑bank decisions: a rate hold from the Bank of Canada (BoC) and a fresh quarter‑point cut from the U.S. Federal Reserve.
By late morning and into the early afternoon, the S&P/TSX Composite was up roughly 40–90 points, or about 0.1–0.3%, trading in a range around 31,280–31,320 after closing Tuesday at 31,244.37. [1] That keeps the index less than 1% below its recent all‑time high near 31,541, set earlier this month. [2]
Financials and base‑metal miners led the advance, while retail, communications and parts of the energy complex lagged. [3] The Canadian dollar held just above 72 U.S. cents, and softer oil and gold prices helped cap gains for the resource‑heavy benchmark. [4]
Quick snapshot: Canada stock market today
As of early–mid‑afternoon Eastern Time on Wednesday, Dec. 10, 2025:
- S&P/TSX Composite Index
- S&P/TSX 60
- Up about 0.2% around midday, near 1,836.7. [8]
- Currency – Canadian dollar (CAD)
- Key commodities relevant to TSX
- Macro backdrop
Bank of Canada holds at 2.25% – a “steady hand” for Bay Street
The main domestic driver for Canadian markets today is the Bank of Canada’s final policy decision of 2025. The central bank:
- Kept the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. [15]
- Noted that global growth remains resilient, even as U.S. trade protectionism and tariffs continue to cloud the outlook. [16]
- Highlighted a surprisingly strong 2.6% annualized GDP growth in Q3, driven by trade volatility, while domestic demand was flat. [17]
- Pointed out that Canadian unemployment has eased to 6.5%, with employment gains over the past three months, though trade‑sensitive sectors remain soft. [18]
- Emphasized that headline inflation is near 2% (2.2% in October), with underlying core inflation still around 2.5%. [19]
The Bank’s message is that the current rate is “about the right level” to keep inflation anchored near target while the economy adjusts to shifting trade patterns and tariffs, but it stands ready to respond if the outlook changes materially. [20]
Independent coverage reinforces that view: Morningstar’s economic commentary says most analysts now expect the BoC to remain on hold well into 2026, barring a significant shock to U.S. trade or domestic data. [21]Kitco also frames today’s decision as a pause following an easing cycle, noting that growth, inflation and jobs have improved but uncertainty is still elevated. [22]
For Bay Street, a steady BoC has several implications:
- Banks and insurers benefit from reduced policy uncertainty, even if net interest margins are no longer expanding sharply.
- Rate‑sensitive sectors like real estate investment trusts, utilities and pipelines gain some visibility on funding costs.
- A less volatile loonie helps exporters and global investors who benchmark portfolios to unhedged Canadian equity indices.
Sector moves: financials and metals up, retailers and energy under pressure
Financials: banks and insurers carry the index
Strength in financials has been one of the main supports for the TSX today:
- Late‑morning reports from Canadian Press and MarketScreener point to financials among the best‑performing sectors, helping push the composite higher. [23]
- TradingEconomics notes earlier that banks and insurers such as TD Bank, Manulife and Sun Life were up roughly 0.7–1.1%, contributing to sector outperformance as investors re‑price the risk of further BoC cuts. [24]
Smaller financials are also in focus. VersaBank shares, for example, were up about 2% in pre‑market trading after reporting higher Q4 adjusted earnings and revenue, adding to the positive tone across the group. [25]
Materials and base metals: modest tailwind
Coverage from Canadian Press highlights base‑metal miners as another source of strength, with the materials group benefiting from firmer industrial‑metal prices and hopes that global growth can withstand tariff noise. [26]
This fits with recent weekly round‑ups that show Canadian mining stocks among the top TSX and TSXV performers, particularly silver‑focused names. [27] While today’s gold futures are slightly lower in U.S. dollar terms, the combination of a softer greenback after the Fed decision and still‑elevated bullion prices keeps sentiment constructive toward precious‑metal producers. [28]
Energy: oil softness caps gains
On the downside, energy is one of the laggards:
- The January crude contract sits below US$58 per barrel, down about 0.8% on the session, which weighs on oil‑sands and conventional producers. [29]
- MarketScreener notes that energy shares are among the sectors trading lower, alongside communications and retail. [30]
Baystreet’s “TSX Finds Stride by Noon” update flags Canadian Natural Resources (CNQ) as an actively watched name, reflecting how investors use the large integrated producers as a barometer for broader sentiment in the patch. [31]
Retail and consumer names: North West Company under pressure
Retail is the clear weak spot of the day:
- Dow Jones / Morningstar reporting notes that North West Company shares fell about 4.5%, after the grocer and general‑merchandise retailer reported lower Canadian sales, overshadowing performance in its northern and international operations. [32]
- That drop makes North West one of the more notable single‑stock decliners on the TSX today and drags on the broader consumer space.
Overall, the pattern is classic “central‑bank day” positioning: investors favour financials, cyclicals tied to global growth and quality large caps, while trimming more rate‑sensitive or stretched areas like parts of retail and communications.
Loonie, yields and commodities: the macro backdrop for Canadian stocks
Canadian dollar edges higher but stays range‑bound
The Canadian dollar reacted modestly to the BoC’s decision:
- Reuters reports the loonie gained around 0.1% versus the U.S. dollar after the central bank held rates, with Canadian bond yields also edging higher. [33]
- Canadian Press pegs the spot rate at 72.24 U.S. cents, only slightly above Tuesday’s 72.23 cents, underscoring how fully markets had priced in a hold. [34]
- Bank of Canada’s own data and FX platforms like XE show 1 CAD buying just over US$0.72 and 1 USD costing around C$1.38. [35]
A stable, mildly firmer loonie is generally supportive for domestic demand and imported inflation, but it can trim translated earnings for Canadian exporters and multinationals who report in Canadian dollars.
Oil and gold: two key levers for the TSX
For the TSX, which remains heavily tilted toward energy and materials, today’s commodity picture is mixed:
- Crude oil is weaker on the day, with front‑month contracts trading just under US$58 per barrel. Lower prices pressure energy equities and royalty plays and are one reason the index isn’t mounting a stronger rally. [36]
- Gold, meanwhile, is only slightly lower intraday and remains near historically high nominal levels, even after recent volatility. Precious‑metal miners, especially silver‑heavy names, have been among the TSX’s stronger performers in recent weeks. [37]
With the Fed cutting and the BoC on hold, the interest‑rate environment is shifting in a way that historically favours real assets over time, but near‑term moves will still be driven by daily headlines on tariffs, growth and inflation.
Fed cuts rates: implications for Canadian equities
Just over an hour before the TSX’s closing bell, the U.S. Federal Reserve cut its benchmark rate by 25 basis points, citing ongoing worries about the labour market and a desire to support growth. [38]
While markets had largely priced in the move, several dynamics matter for Canada:
- Yield spreads and currency
- A Fed cut, with the BoC on hold, narrows the rate differential between U.S. and Canadian policy rates.
- All else equal, that can support the loonie, especially if markets believe the BoC is closer to the end of its easing cycle than the Fed. [39]
- Risk appetite and valuations
- Commentary ahead of today’s meeting emphasized the risk of a “hawkish cut,” where the Fed reduces rates but signals caution about further easing. [40]
- If investors interpret the new Fed projections as limiting future cuts, global equity markets may see more of a consolidation than a melt‑up, which could keep the TSX in a trading range near current highs.
- Sector winners and losers on the TSX
- Rate‑sensitive and high‑dividend sectors (pipelines, telecoms, REITs, utilities) benefit from lower global discount rates, even if domestic policy is unchanged.
- Commodity producers can gain from a softer U.S. dollar and improved global‑growth expectations, though the relationship is rarely linear.
- Defensives like staples and some healthcare names may lag if investors rotate into cyclicals and financials—precisely what we’ve started to see on the TSX today. [41]
In other words, the Fed’s move doesn’t radically change the Canadian story today, but it strengthens the case that 2026 could feature easier global financial conditions—supportive for a resource‑ and financial‑heavy market like Canada’s, as long as growth holds up.
How strong is this rally? Context for the TSX’s big 2025 run
Even before today’s moves, Canada’s main index has had a standout year:
- TradingEconomics data show the TSX up just over 22% year‑on‑year, with a roughly 3% gain over the past month and a record high above 31,540 set in early December. [42]
- Recent weeks saw a string of record closes, driven by strong bank earnings, rising tech names like Shopify and resilience in energy and materials. [43]
At the same time, some strategists warn the market may need a breather:
- A Reuters piece earlier this week quoted portfolio managers who expect short‑term profit‑taking after such a strong run, followed by a possible “Santa Claus rally” into year‑end as investors redeploy cash and look ahead to 2026. [44]
- RTTNews this morning described Bay Street’s open as cautious, with traders focused squarely on today’s BoC and Fed decisions after Tuesday’s modest advance. [45]
Given that backdrop, today’s measured gains—rather than a euphoric surge—may actually be a healthy sign. Markets appear to be absorbing central‑bank news without panic, keeping the TSX within striking distance of record territory but not wildly extended.
Outlook: what today’s news means for Canadian investors
Putting it all together, here’s what today’s developments suggest for the near‑term outlook on Canada’s stock market:
- Base case: sideways‑to‑higher TSX into early 2026
- With the BoC signalling comfort at 2.25% and inflation near target, policy risk in Canada has de‑escalatedfor now. [46]
- The Fed’s cut should gradually ease global financial conditions, helping credit‑sensitive sectors and supporting risk assets generally. [47]
- As long as corporate earnings stay resilient and commodity prices don’t collapse, the TSX could consolidate near current levels with periodic pushes to fresh highs.
- Upside scenario: renewed record run
- A further rally is plausible if:
- U.S. and Canadian data confirm a soft‑landing rather than a sharp slowdown.
- Trade tensions or tariff risks ease instead of intensifying.
- The Fed opens the door to more than one or two cuts in 2026. [48]
- A further rally is plausible if:
- Downside risks to watch
- A surprise re‑acceleration in inflation could force either central bank back into a more hawkish stance.
- A sharper‑than‑expected global growth slowdown would hit cyclical sectors like energy, industrials and base metals—the backbone of the TSX.
- Prolonged or escalating trade disputes could undermine the BoC’s forecast of improving domestic demand and stable inflation. [49]
For individual investors, today’s message is less about chasing intraday moves and more about recognizing that:
- Financials and quality cyclicals remain central to the Canadian equity story.
- Diversification across sectors—including some defensives and growth names—helps manage volatility as central‑bank policy evolves.
- Currency exposure matters: a stronger loonie can affect returns on U.S. and international holdings as well as on Canadian exporters.
Final note
All figures above reflect publicly reported data through the early–mid‑afternoon of December 10, 2025 (Eastern Time) and may differ from final closing levels. Markets can move quickly on central‑bank days, so always check real‑time prices before making trading decisions.
This article is for information purposes only and does not constitute investment advice.
References
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