Canada Stock Market Today (Dec. 5, 2025): TSX Sits at Record High as Bank Earnings and Rate Hopes Drive 2026 Optimism

Canada’s stock market heads into Friday, December 5, 2025, with the S&P/TSX Composite Index perched at a record closing high after a powerful rally led by the country’s biggest banks and supported by firm commodity prices.

As of Thursday’s close, the benchmark S&P/TSX Composite finished at 31,477.57, up about 317 points or 1.0%, its highest close on record and roughly 1–2% above the late‑November peaks. ^[1]

At the time of writing, North American cash markets have not yet opened for Friday’s session, so Thursday’s record close remains the latest official level for the Toronto benchmark. Futures and sentiment are being shaped by today’s November jobs report from Statistics Canada and next week’s Bank of Canada (BoC) rate decision, both key catalysts for Canadian stocks. ^[2]

Where the TSX Stands Today

A record high after a powerful year

Several data providers show the TSX has climbed around 25–30% on a total‑return basis in 2025, putting it on track for its strongest year since 2009 and outpacing U.S. benchmarks despite starting the year at a large valuation discount. TechStock²+1

Key points coming into Friday, Dec. 5:

Latest close: 31,477.57 (Thursday, Dec. 4)
Single‑day move: roughly +1.02% on Thursday
Recent trend: the index has repeatedly traded near or above prior record levels over the past two weeks, with intraday highs in the 31,400+ area. ^[3]

Earlier in the week, the TSX had already been “near record highs” thanks to a steady grind higher in bank stocks and energy names as oil held just below US$60 per barrel. ^[4]

Big Six Banks Power the Rally

Financials account for a large slice of the TSX, and this leg of the rally is very much a Big Six bank story.

Royal Bank of Canada: record earnings and higher ROE targets

Royal Bank of Canada (RBC), the index’s single biggest component, reported record fourth‑quarter and full‑year results this week:

Adjusted Q4 net income: about C$5.55 billion, up 25% year‑on‑year
Adjusted EPS:C$3.85, beating analyst expectations of C$3.53
Capital markets net income: up 45%, driven by stronger trading and M&A
Wealth management earnings: up around 33%

RBC also raised its medium‑term return‑on‑equity target to above 17% for fiscal 2026 (from 16%) and increased its quarterly dividend by roughly 6%, helping push its shares to a record high near C$220. ^[5]

For the TSX, that combination of stronger earnings and a bigger dividend from its largest company is a powerful tailwind.

CIBC: capital markets surge and a double‑digit dividend hike

Canadian Imperial Bank of Commerce (CIBC) added fuel to the rally on Thursday:

Capital markets net income: up 58.4% to C$548 million
Net interest income: rose to C$4.13 billion from C$3.63 billion
Adjusted net income:C$2.19 billion, or C$2.21 per share, up from C$1.89 billion (C$1.91 per share) a year earlier ^[6]
The bank also raised its common share dividend to about C$1.07, more than 10% higher than the prior payout, according to its investor materials and market commentary. TechStock²+1

That dividend increase reinforces the TSX’s appeal as a high‑yield market relative to U.S. indices.

Bank of Montreal and the rest of the Big Six

Bank of Montreal (BMO) likewise posted a strong quarter:

Capital markets profit more than doubled to about C$521 million from C$251 million
Provisions for credit losses fell to C$755 million from C$1.52 billion, signalling improving credit quality
Adjusted net profit climbed to around C$2.51 billion, or C$3.28 per share, up from C$1.90 per share a year earlier ^[7]

Reuters reporting and bank releases show that TD, Scotiabank and National Bank have also beaten profit expectations this season, largely because of capital markets and wealth‑management strength, even as traditional loan growth remains sluggish. ^[8]

Taken together, the Big Six banks have wrapped up fiscal 2025 with better‑than‑expected earnings and rising dividends, which is exactly the kind of fundamental backdrop that tends to keep the TSX’s financials-heavy index well supported. ^[9]

Banking Shake‑Up: Fairstone–Laurentian Deal Reshapes the Landscape

Beyond earnings, Canada’s financial sector is also being reshaped by M&A activity:

Fairstone Bank has agreed to buy Laurentian Bank of Canada for about C$1.9 billion, paying C$40.50 per share in cash, a roughly 20% premium to Laurentian’s last close before the announcement. ^[10]
The deal will split Laurentian’s business: Fairstone will acquire the commercial lending franchise, while National Bank of Canada will purchase Laurentian’s consumer and small‑business portfolios at book value. ^[11]

Laurentian will keep its brand and Montreal head office, but the transaction highlights ongoing consolidation in mid‑tier Canadian banking after years of underperformance and strategic missteps. ^[12]

For the TSX, this is less about index points today and more about the medium‑term structure of Canada’s financial system, with a heavier concentration of assets in larger, better‑capitalized institutions.

Macro Backdrop: Growth Rebound, but Services Are Stalling

Beneath the record stock prices, the economic data are mixed.

GDP: headline strength, underlying softness

Fresh GDP figures show Canada’s economy grew more strongly than expected in the third quarter:

Q3 2025 GDP: rebounded at a 2.6% annualised pace, beating earlier forecasts
September GDP: rose 0.2% month‑on‑month ^[13]

However, economists point out that the strength was heavily influenced by trade and inventory swings:

Final domestic demand was essentially flat (around ‑0.1%), suggesting underlying domestic momentum is weak
TD and CIBC economists cited in Canadian Mortgage Trends argue that the data support a BoC rate hold, but not a return to aggressive tightening. ^[14]

Services PMI: a clear warning signal

The latest S&P Global Canada Services PMI is more alarming:

November’s services PMI fell to 44.3 from 50.5 in October — the sharpest contraction in five months
New business dropped to 45.0, and the employment index slid to 47.1, its weakest since mid‑2020
The composite output PMI (services plus manufacturing) fell to 44.9, also a multi‑month low ^[15]

Economists at S&P Global describe the data as a “sobering overview” of Canada’s services economy as 2025 wraps up, with clients hesitant to commit to new work amid trade uncertainty and tariffs pushing up costs.

Labour market: flat jobs expected today

November jobs data, due this morning, are the last major release before the BoC’s December 10 decision:

RBC Economics expects “flat” employment growth in November after outsized gains in September and October, with the unemployment rate holding at about 6.9%, roughly one percentage point above what they consider a “normal” level. ^[16]
A separate preview notes that today’s figures will be “the last major data release” before the BoC meets, underscoring their importance for rate expectations and the TSX. ^[17]

In short, the macro backdrop is good enough to avoid a recession narrative for now, but far from booming.

Interest Rates: Bank of Canada Seen on Hold

The Bank of Canada is front‑and‑centre in market thinking.

In late October, the BoC cut its overnight rate by 25 bps to 2.25%, a three‑year low and near the bottom of its estimated neutral range (2.25–3.25%). ^[18]
RBC Economics and other forecasters say that cut likely put policy “about where it should be”, making additional easing unlikely unless there is a notable downside surprise in growth or inflation. ^[19]
A BoC rate‑forecast summary from WOWA and a November outlook from Vanguard both suggest the policy rate is now expected to remain broadly stable through 2026, barring a fresh shock. ^[20]

Markets are largely positioned for a rate hold on December 10, but attention will focus heavily on any forward guidance around the path for 2026.

At the same time, traders are watching the U.S. Federal Reserve, where futures pricing implies a high probability of a rate cut this month, a key support for global risk assets including Canadian equities. ^[21]

Currency and Commodities: Tailwinds for Canadian Stocks

Canadian dollar: modest upside, but less optimism

The Canadian dollar has rallied into this week, trading around C$1.39–1.40 per U.S. dollar, close to a five‑week high, helped by higher oil prices and solid productivity data. ^[22]

But a fresh Reuters FX poll suggests that optimism has cooled:

Median forecasts from 33 FX strategists see the loonie strengthening only modestly to about 1.39 in three months and 1.36 in 12 months, versus the U.S. dollar
Trade uncertainty with the U.S. and doubts about the impact of the federal budget are key headwinds
Some analysts think the BoC may still need to cut rates slightly further, below the estimated neutral range, though markets see only limited additional easing ^[23]

For TSX investors, a moderately weaker but stable currency is often a sweet spot: it supports exporters and resource companies without triggering panic about capital flight.

Oil and gold: supporting the TSX’s sector mix

The TSX continues to benefit from its classic “old‑economy” tilt:

Oil prices have been trading just under US$60 per barrel this week, and the energy sub‑index rose around 0.8%–2% on Thursday as crude ticked higher on renewed geopolitical concerns. ^[24]
Earlier Reuters polling indicates that energy and materials (about 32% of the index) are expected to be key beneficiaries of AI‑driven demand for metals and infrastructure‑related energy use in 2026. ^[25]

That mix — banks + commodities + dividend‑rich utilities and pipelines — is a core reason strategists continue to see room for Canadian equities to outperform even after this year’s big run.

2026 Forecasts: Strategists See More Highs, but Slower Gains

The latest Reuters survey of 20 strategists shows a moderately bullish outlook for the TSX:

Median forecast: the S&P/TSX Composite rises nearly 5% to about 32,125 by the end of 2026, setting fresh all‑time highs but at a much slower pace than 2025’s surge
By mid‑2027, the index is projected around 33,925, roughly 11% above current levels ^[26]

Drivers cited in the poll include:

Easing trade tensions and progress on North American trade policy
Increased government spending on productivity and infrastructure projects
A continued push into AI‑related and data‑centre investments, which lift demand for Canadian energy and metals producers

However, the same poll notes that 11 of 15 analysts expect at least a temporary market correction in the near term, warning that valuations have become richer and that the earlier gold price boom is losing momentum. ^[27]

In other words, the base case is for higher TSX levels over the next 12–18 months, but with more volatility and shallower gains than in 2025.

What Canada Stock Market Investors Should Watch Today

For Friday, December 5, 2025, here are the key things on the radar for anyone following Canada stock market today:

November Jobs Report (Statistics Canada)
- Headline employment change and the unemployment rate around 6.9% will feed directly into rate expectations and bank‑stock sentiment. ^[28]
Bank of Canada Communications
- Any speeches or comments ahead of the December 10 rate decision could reinforce (or challenge) the market’s assumption of a prolonged hold at 2.25%. ^[29]
Big Six Bank Stocks
- After RBC, CIBC, BMO and others beat Q4 expectations and lifted dividends, investors will be watching whether the rally broadens or whether profit‑taking hits these leaders after a strong week. ^[30]
Energy and Materials Names
- With oil just under US$60 and gold still elevated on a multi‑year view, moves in Canadian oil sands producers, miners and pipeline operators remain central to intraday TSX action. ^[31]
Canadian Dollar vs. U.S. Dollar
- A loonie stuck in the 1.39–1.40 range would keep conditions benign for exporters; a sharper move — especially if tied to surprise BoC guidance — could introduce fresh volatility. ^[32]

Bottom Line

On December 5, 2025, the Canada stock market is entering the final weeks of the year from a position of unusual strength:

The TSX is at a record high, powered by robust bank earnings, solid dividends and firmer commodity prices. ^[33]
Economic data are mixed: headline GDP has improved, but services activity and forward‑looking surveys point to a still‑fragile economy. ^[34]
The BoC is expected to stay on hold, and most strategists see further, if slower, gains into 2026, albeit with a high risk of near‑term corrections. ^[35]

For investors, that combination argues for selectivity rather than complacency: bank stocks, high‑quality dividend payers and well‑positioned resource names continue to look like the core pillars of the Canada stock market today, but the macro signals suggest that volatility and dispersion could be the defining features of 2026.