Canada Stock Market Today: TSX Near Record High as Bank Earnings and BRP Rally Lift Toronto

December 4, 2025 – Toronto

Canada’s stock market powered higher on Thursday, with the S&P/TSX Composite trading near record territory as strong bank earnings, a surge in BRP shares and firmer commodity prices encouraged investors into risk assets. By late morning and early afternoon, the benchmark index was up around 0.9% and hovering in the low‑31,000s – roughly 31,400–31,450 – putting it within a few dozen points of its 52‑week high near 31,520. ^[1]

Gains were broad-based across almost all major sectors, led by financials, energy, industrials and technology. Under the surface, the story of the day was clear: better‑than‑expected profits and dividend hikes from Canada’s biggest banks, plus upbeat results from Ski‑Doo and Sea‑Doo maker BRP, reinforced the idea that the TSX’s 2025 winning streak may have more room to run. ^[2]

TSX Today: Index Performance and Market Breadth

TSX nears fresh highs

Midday updates from Canadian Press and major index providers showed the S&P/TSX Composite up nearly 300 points, or just under 1%, with levels around 31,450. ^[3]

That rally keeps the index pressed up against the top of its recent trading range. Data from index trackers indicate a 52‑week range of roughly 22,200 to 31,520, underscoring just how far Canadian equities have climbed this year. ^[4]

Market breadth was notably strong. A Dow Jones summary via MarketWatch and MarketScreener reported that nearly every TSX sector was trading higher, with the blue‑chip S&P/TSX 60 index up about 1% to the mid‑1,800s. ^[5]

Canada outpacing a softer Wall Street session

The Canadian rally came even as U.S. markets cooled slightly. In late‑morning trading, the Dow Jones Industrial Average was down roughly 35 points, the S&P 500 was marginally lower and the Nasdaq dipped fractionally – a modest pause after a strong run that has left U.S. indices near record highs. ^[6]

That divergence – TSX up solidly while Wall Street takes a breather – echoes a bigger 2025 pattern. A new Bloomberg analysis notes that the S&P/TSX Composite is up about 26% year‑to‑date, its best trajectory since 2009, and has outperformed the S&P 500 by roughly 10 percentage points in local‑currency terms (and even more after adjusting for FX). ^[7]

Big Six Banks in Focus: Earnings and Dividends Drive the Financials Rally

Fresh Q4 beats from CIBC, TD and BMO

Thursday’s move in financials was fueled by a wave of fourth‑quarter results and dividend news from major banks:

CIBC reported a strong Q4, with adjusted profit rising and capital‑markets income jumping more than 50% year‑over‑year as volatility and higher trading activity boosted fees. ^[8]
Toronto‑Dominion Bank (TD) posted Q4 adjusted earnings of about C$2.18 per share, beating analyst expectations around C$2.01, alongside revenue that also topped forecasts. ^[9]
Bank of Montreal (BMO) delivered higher adjusted earnings and announced a quarterly common‑share dividend of C$1.67 – a 2% increase from the prior quarter and 5% above a year ago. ^[10]

Taken together, the fresh numbers reinforced Wednesday’s blockbuster report from Royal Bank of Canada (RBC), which showed full‑year net income of about C$20.4 billion in fiscal 2025, up roughly 25% year‑on‑year, driven by robust capital‑markets and wealth‑management businesses. ^[11]

Dividend hikes and a “health check” on the banking system

Beyond the headline profit beats, dividend decisions were a big confidence signal for investors:

TD moved from an annual to a semi‑annual dividend review cycle and declared a C$1.08 common‑share dividend for the quarter ending January 31, 2026. ^[12]
CIBC’s board raised its quarterly common‑share dividend to around C$1.07, more than 10% above the previous payout. TechStock²+1
BMO’s higher dividend followed strong results across its Canadian and U.S. operations. ^[13]

Reuters coverage earlier in the day summed up the message: Q4 results from the Big Six are reinforcing views of a “healthy and resilient” Canadian banking sector, even as loan‑loss provisions tick up to reflect softer economic growth. ^[14]

That backdrop helps explain why financials – roughly a third of the TSX by weight – were key to Thursday’s index gains and why strategists increasingly describe bank shares as the “backbone” of the Canadian market’s 2025 rally. TechStock²+1

BRP Headlines the Non‑Bank Winners

Strong quarter, upgraded outlook

Outside of the banks, BRP Inc. (DOO.TO / DOOO) was one of the day’s star performers after reporting a strong fiscal Q3 and raising guidance:

Q3 revenue increased about 14% year‑over‑year to roughly C$2.25 billion.
Normalized EBITDA rose just over 20% to around C$325 million.
Management lifted fiscal 2026 revenue guidance to about C$8.3 billion and boosted normalized EPS guidance to approximately C$5.00, up from a prior C$4.25–C$4.75 range. ^[15]

Canadian Press and Dow Jones reports noted that BRP’s stronger‑than‑expected quarter, plus an upgraded multi‑year outlook, sent the stock sharply higher and was a key contributor to the index’s outperformance on the day. ^[16]

Buybacks add another tailwind

In a separate announcement, BRP said the TSX has approved the renewal of its normal course issuer bid, allowing the company to repurchase up to about 10% of its public float over the next twelve months. ^[17]

For investors, that combination – better earnings, higher guidance and active share buybacks – is precisely the “shareholder‑friendly” recipe that has helped TSX consumer and industrial names outperform in 2025. ^[18]

Commodities, Loonie and Rates: The Macro Picture Behind the Rally

Oil up, gold firm – a familiar TSX cocktail

Energy names also contributed to Thursday’s gains. Benchmark U.S. crude traded around US$59.5–60 per barrel, up roughly 1–1.5% on the day, helped by ongoing supply concerns linked to Ukrainian attacks on Russian energy infrastructure. ^[19]

Gold futures, which recently spiked to record levels above US$4,100 an ounce, were modestly higher in Canadian mid‑morning data but have eased back from this week’s extremes, shifting some momentum from gold miners toward energy producers and pipeline operators. ^[20]

Canadian dollar near a five‑week high

The Canadian dollar (“loonie”) was little changed on the day around C$1.3945 per U.S. dollar (about 71.7 U.S. cents), but that masks an important detail: it briefly touched its strongest level since October 29 before pulling back. ^[21]

Reuters reporting attributes the currency’s resilience to:

Higher oil prices and equity gains.
Recent upside surprises in Canadian GDP data.
Hopes that potential fiscal measures could further support growth. ^[22]

Bank of Canada: On hold for now after October cut

The macro backdrop remains more complicated than the stock rally might suggest. In late October, the Bank of Canada (BoC) cut its policy rate to 2.25%, a more‑than‑three‑year low, citing the impact of U.S. tariffs and softer global demand. ^[23]

RBC Economics’ latest Forward Guidance note expects November employment to be essentially flat and the unemployment rate to hold near 6.9%, with the jobs report on Friday likely to be the last major data point before the BoC’s December 10 decision. RBC argues that rates are now near the “lower end of neutral,” making further cuts unlikely unless growth or inflation data deteriorate materially. ^[24]

Markets largely agree: rate‑futures pricing implies no change next week, but traders are watching labour and trade data closely for any sign that the central bank might need to ease again in 2026. ^[25]

Growth Data: PMIs and Ivey Index Flash Warning Signs

Under the surface of the equity rally, recent business‑survey data show a clear slowdown:

Composite PMI: The S&P Global Canada Composite PMI fell to 44.9 in November, down from 50.3 in October, indicating the sharpest contraction in five months. ^[26]
Services PMI: Services activity dropped steeply, with the index sliding to 44.3 from 50.5, as new business declined for a 12th straight month and employment fell to its lowest level since mid‑2020. ^[27]
Manufacturing PMI: Factory activity weakened further, with the manufacturing PMI slipping to 48.4 from 49.6 amid falling new orders and ongoing trade tensions with the United States. ^[28]
Ivey PMI: The Ivey PMI, another broad gauge of Canadian economic activity, also dropped below 50 in November, pointing to contraction for the first time in six months and highlighting falling employment even as price pressures remain elevated. ^[29]

These readings align with commentary from economists who warn that while the stock market is celebrating earnings and rate‑cut hopes, the real economy is feeling the strain of higher borrowing costs earlier in the cycle, global trade frictions and cautious corporate hiring plans. ^[30]

Why Strategists Think the TSX Can Still Outperform in 2026

Despite those macro headwinds, several major firms argue that Canadian equities are well‑placed for the next leg of the global cycle.

Bloomberg: Best year since 2009, and momentum still building

Bloomberg’s new piece, “Canadian Stocks Seen Outperforming US Stocks in 2026 on Economy,” highlights several key points: ^[31]

With about four weeks left in 2025, the TSX is up roughly 26%, on pace for its best annual gain since 2009.
The index is beating the S&P 500 by around 10 percentage points in a rising market – the first such outperformance since 2016.
Even after this year’s surge, Canadian stocks still trade at a meaningful valuation discount to U.S. peers.

That combination of strong recent performance and still‑modest valuations is central to the bull case for 2026.

Desjardins: Broader market, less “mega‑cap risk”

An October strategy note from Desjardins argues that the TSX should continue to outperform the S&P 500 both this year and next, pointing to: ^[32]

More diversified drivers of returns, with commodities, financials and industrials sharing the load.
Less concentration risk than the S&P 500, where a handful of giant U.S. tech stocks dominate index performance.

CIBC Asset Management & others: Diversification, dividends and discounts

CIBC Asset Management’s Craig Jerusalim has been making a similar case in recent articles and podcasts, emphasizing four reasons Canada looks attractive relative to the U.S.: ^[33]

Greater sector diversification versus U.S. indices.
Comparable earnings growth despite a smaller tech sector.
Higher dividend yields, especially from banks, utilities and pipelines.
Cheaper valuations, with Canadian equities trading at a notable discount even after a strong year. ^[34]

A Reuters‑summarized strategist poll, cited by TS2.tech, suggests the S&P/TSX Composite could climb to around 32,100–32,200 by the end of 2026, implying moderate additional upside of roughly 5% from current levels – more “grind higher” than melt‑up, but enough to keep Canada competitive in global portfolios. TechStock²

Key Risks: Trade Tensions, USMCA and Slowing Activity

While Thursday’s price action was decisively bullish, several risk factors remain on investors’ radar:

Trade policy & USMCA: Reports citing U.S. trade officials and political commentary suggest the possibility of renewed pressure on the United States‑Mexico‑Canada Agreement (USMCA) ahead of its 2026 review, including the theoretical risk of a U.S. withdrawal or hard‑line renegotiation. That would have major implications for Canadian exporters, especially in autos, agriculture and manufacturing. TechStock²+1
Tariffs and cost pressures: Existing U.S. tariffs on Canadian goods have already weighed on manufacturing surveys and contributed to weaker new‑order and employment readings in PMIs. ^[35]
Domestic slowdown: Falling PMIs, a softening housing market and rising unemployment relative to pre‑pandemic lows indicate that the Canadian economy is losing momentum, even as equity indices push higher. ^[36]
Global rate and growth risks: The TSX has benefited from expectations of both BoC and U.S. Federal Reserve rate cuts next year. If inflation re‑accelerates or fiscal stress forces central banks to stay tighter for longer, valuations in rate‑sensitive sectors like real estate and utilities could come under pressure. TechStock²+1

What Today’s Moves Mean for Investors

For traders and longer‑term investors alike, Thursday’s action in Canada’s stock market underscores a few key themes:

Financials remain central. With banks delivering strong Q4 profits and raising dividends, the sector continues to anchor both the TSX’s income profile and its recent price performance. It’s hard to imagine a sustained Canadian bull market that doesn’t involve stable or rising bank earnings. ^[37]
Quality cyclicals are back in favour. BRP’s surge on solid execution and higher guidance fits a broader pattern of investors rewarding companies that can grow earnings despite macro uncertainty, especially when they back that growth with buybacks or dividend increases. ^[38]
Macro data and central banks still matter – a lot. With PMIs signaling contraction and the labour market expected to flatten out, the BoC’s December 10 meeting and Friday’s jobs report will be crucial in shaping how durable this late‑year rally can be. ^[39]
Canada’s relative story is strong but not risk‑free. Strategists from Desjardins, CIBC Asset Management and others see continued TSX outperformance in 2026 thanks to diversification, dividends and cheaper valuations, but those views assume no severe trade shock and at least a modest global soft landing. ^[40]

For now, the verdict from Bay Street is clear: despite a cooling economy, the combination of resilient bank earnings, supportive commodity prices and a friendlier rate backdrop has put Canadian equities back in the global spotlight – and Thursday’s rally shows that investors are still willing to pay up for that story.