Canada’s stock market ended Christmas Eve on a slightly weaker footing, with the S&P/TSX Composite Index easing back from this week’s record territory as profit-taking hit materials and mining names in a holiday-shortened sessionthat kept trading volumes light.
The pullback was modest—but the day’s moves carried a clear year-end message: after a powerful run powered by precious metals, financials, and resource-linked momentum, investors appear increasingly selective about where they take risk into the final stretch of 2025 and the start of 2026. ( [1])
TSX market recap: A quiet Christmas Eve close, but still near 32,000
In a shortened session that wrapped up early for the holidays, the S&P/TSX Composite finished down about 0.2% at 31,999.76, drifting lower after moving in a wide intraday band as thin liquidity amplified some moves. ( [2])
Holiday trading hours mattered today. According to TMX Group’s holiday operating schedule, TSX and TSX Venture Exchange were scheduled to close at 1:00 p.m. ET on Wednesday, Dec. 24, with Canadian markets closed for Christmas Day and Boxing Day. ( [3])
That early close typically compresses trading into a shorter window—and can exaggerate sector swings, especially after a strong multi-day rally.
Why the TSX dipped: Materials and energy pulled back
The main drag on Canadian equities came from the materials sector, where investors used the lighter session to lock in gains after a blistering run in metals. Reuters data showed the materials group fell about 0.9%, while energy also edged lower on the day.
Even with today’s slip, the TSX remained within striking distance of the 32,000 level—a psychologically important mark that the market has repeatedly tested this week.
The bigger context: TSX is still on track for its strongest year since 2009
Today’s small decline is best understood in the context of a standout year for Canadian stocks:
- Earlier this week, the TSX notched consecutive record closes, including 32,058.73 on Tuesday (Dec. 23), with the index up sharply year-to-date. ( [4])
- On Monday (Dec. 22), the TSX closed above 32,000 as gold and silver surged to fresh highs, underscoring how central commodity strength has been to Canada’s 2025 equity story. ( [5])
- By late December, the TSX had gained roughly around 29% for the year, putting it on pace for its best annual performance since 2009, according to Reuters reporting across the week. ( [6])
That’s a powerful tailwind—and it helps explain why “quiet” sessions like Christmas Eve often become a venue for tactical profit-taking rather than a wholesale change in trend.
Canada’s dollar strengthened: Loonie hits a near five-month high
While Canadian stocks softened slightly, the Canadian dollar strengthened—a notable development for Canada’s market narrative because the loonie often tracks shifts in commodities, rate expectations, and risk sentiment.
Reuters reported the loonie traded around 1.3672 per U.S. dollar (about 73.14 U.S. cents) and touched its strongest level since late July. Strategists cited a broader softening in the U.S. dollar, narrower U.S.–Canada yield spreads, and recent gains in commodity prices as supportive factors. ( [7])
For Canadian investors, a firmer loonie can be a mixed bag:
- It can reduce imported inflation and support consumer purchasing power.
- But it can also trim the value of U.S.-dollar earnings when translated back into Canadian dollars for some exporters.
Key macro news in Canada today: Manufacturing sales fell (advance indicator)
Adding a domestic economic layer to the day, Statistics Canada released an advance indicator showing manufacturing sales fell 1.1% in November. StatCan noted the largest declines were in transportation equipment and food, and emphasized the estimate is subject to revision as more responses come in. ( [8])
That kind of data matters because it feeds directly into the next big question for markets: where Canadian interest rates go next.
Bank of Canada policy signal: Officials remain “data-dependent” and uncertain on direction
The interest-rate backdrop remains unusually nuanced.
Minutes from the Bank of Canada’s Dec. 10 decision (released this week) showed policymakers found it difficult to predict whether the next move would be a hike or a cut, citing volatile data and uncertainty tied to U.S. trade policy. The minutes also reiterated that the policy rate was held at 2.25%, which officials saw as consistent with keeping inflation near the 2% target—while staying ready to respond if conditions shift. ( [9])
This matters for stocks because:
- Lower rates (or expectations of easing) generally support equity valuations, especially for growth and long-duration sectors.
- Sticky inflation or renewed growth could revive the case for tighter policy—raising discount rates and challenging elevated valuations.
Global backdrop helped sentiment: Wall Street hit fresh records in a “Santa rally” start
Even as the TSX drifted slightly lower, global risk appetite remained constructive.
In the U.S., Reuters reported the Dow and S&P 500 closed at record highs in a holiday-shortened session, aided by renewed optimism around AI-linked stocks, resilient data, and expectations for rate cuts in 2026. ( [10])
That matters for Canada because U.S. market strength often spills over into Canadian sentiment, especially in:
- cross-listed names
- financials
- technology and industrial suppliers tied to North American growth
Commodities: Gold and silver cooled from records; oil hovered around $58
Canada’s equity market is famously commodity-sensitive, so today’s commodity tape helped shape sector leadership.
Reuters’ global markets wrap highlighted that gold and silver eased back from record highs, with gold holding just under the $4,500 level late in the session. The same report noted U.S. crude around $58 a barrel, while oil and the dollar were described as being on track for steep annual declines. ( [11])
Meanwhile, Reuters’ Canada FX coverage also pointed to oil’s recent strength, noting crude had been rising over multiple sessions amid concerns about potential supply disruptions. ( [12])
For the TSX specifically, the message was straightforward:
- When precious metals surge, materials/miners often lead.
- When those metals pause—even briefly—profit-taking can quickly show up in that same sector.
Notable movers in Canadian stocks (holiday session edition)
In thin trading, individual names can swing more sharply than usual. A Nasdaq.com market wrap (via RTTNews) noted the TSX ended modestly lower and highlighted a mix of notable decliners and advancers.
Among the cited laggards were Tilray Brands and Perpetua Resources (both down more than 4% in that report), while several gold and mining-related names were also listed among decliners. On the upside, the same wrap pointed to gains in a handful of Canadian corporates including Brookfield-related entities and Celestica. ( [13])
Because Christmas Eve volume is typically thin, many investors treat single-session moves with extra caution—especially when broader trends (like year-end rebalancing) may be driving flows more than fundamentals.
What strategists are watching: Valuations vs. earnings growth into 2026
With the TSX sitting near record territory, the market’s next phase may depend less on “multiple expansion” and more on whether corporate results can justify what investors are paying.
Reuters cited a CIBC Capital Markets note arguing that while Canadian equity valuations sit above longer-term averages, they are not at “bubble” levels—and that a combination of expected earnings growth and supportive investment trends could keep multiples elevated. Themes mentioned include capital spending tied to data centers, infrastructure, and productivity-oriented investment priorities.
At the same time, policy uncertainty is still on the radar—and central bankers have been explicit about how hard it is to forecast the next move amid volatile data. ( [14])
Outlook: What to watch when the TSX returns after the holidays
With Canada’s major exchanges closed for Christmas Day and Boxing Day, attention shifts to the reopening trade and to the early 2026 narrative. Here are the catalysts investors are likely to focus on:
- Liquidity returns: After holiday-thin sessions, the first “full-volume” days can reveal whether today’s dip was just seasonal noise or the start of broader profit-taking. ( [15])
- Commodity direction: Precious metals are still near historic highs even after today’s pullback, and resource-heavy Canadian indexes tend to follow that tone. ( [16])
- Canadian economic momentum: Weakness in manufacturing sales (advance indicator) reinforces the debate about growth heading into 2026. ( [17])
- Rates and central bank expectations: Bank of Canada minutes underscore that the path ahead is not linear—and markets will react quickly to new inflation and growth signals. ( [18])
- U.S. leadership remains a key driver: With Wall Street closing at record highs and investors discussing a “Santa rally,” U.S. sentiment could keep supporting Canada—especially if rate-cut expectations stay alive. ( [19])
Bottom line for Canada’s stock market on 24.12.2025
Canada’s stock market didn’t deliver fireworks on Christmas Eve—but it didn’t need to. The TSX’s small dip looked more like a controlled pause after a record-setting stretch than a decisive turn lower, particularly with the index still hovering around 32,000 and 2025 shaping up as one of the strongest years in more than a decade. ( [20])
The more important story may be what’s forming underneath the surface: a strong loonie, mixed Canadian economic signals, uncertainty over the next Bank of Canada move, and a global backdrop where U.S. equities are at recordsand precious metals remain historically elevated. ( [21])
This article is for informational purposes only and is not investment advice.
References
1. www.nasdaq.com, 2. www.nasdaq.com, 3. investors.tmx.com, 4. www.reuters.com, 5. www.reuters.com, 6. www.reuters.com, 7. www.reuters.com, 8. www150.statcan.gc.ca, 9. www.reuters.com, 10. www.reuters.com, 11. www.reuters.com, 12. www.reuters.com, 13. www.nasdaq.com, 14. www.reuters.com, 15. investors.tmx.com, 16. www.reuters.com, 17. www150.statcan.gc.ca, 18. www.reuters.com, 19. www.reuters.com, 20. www.reuters.com, 21. www.reuters.com
