TORONTO (After the Bell, 4:30 p.m. ET) — Canada’s benchmark stock index ended Friday in the red after a choppy session that saw early strength in cannabis and mining shares give way to a broad tech-led pullback. The S&P/TSX Composite Index closed down 0.4% (133.34 points) at 31,527.39, easing back from Thursday’s record close and trimming what had been shaping up as a stronger finish to the week. [1]
The late-day drag came largely from the same force weighing on global markets: renewed skepticism around richly valued technology and AI-linked names. The dynamic was stark on the TSX, where a surge in health care (driven by cannabis stocks) couldn’t fully offset a sharp decline in the technology sector. [2]
Canada stock market close: TSX ends lower, but still posts a weekly gain
Despite Friday’s dip, the TSX ended the week higher. The benchmark rose 0.7% on the week, supported by a generally constructive rate backdrop after the U.S. Federal Reserve’s latest easing move and ongoing strength in precious metals. [3]
Thursday had set the stage with a fresh record close — 31,660.73 — as metals and upbeat domestic data helped lift the commodity-heavy Canadian index. [4]
Key TSX close takeaways (Dec. 12, 2025):
- S&P/TSX Composite: 31,527.39, -0.4% [5]
- Weekly performance: +0.7% [6]
- Leadership: Health care surged on cannabis strength; tech slumped [7]
Why the TSX fell today: technology weakness overwhelms rotation theme
Friday’s TSX action reflected an increasingly familiar market pattern: sector rotation — moving away from high-multiple growth and into more defensive or cyclical areas — but with enough tech selling pressure to pull the overall index lower.
Reuters highlighted that technology was the biggest laggard, with the sector down 3.4%, led by a steep drop in Celestica, which finished 12.9% lower. [8]
That weakness echoed the broader tone in U.S. markets, where investor concerns about the profitability and valuation of AI-driven spending cycles flared up again after fresh headlines and guidance commentary in the sector. [9]
Even within the TSX’s commodity-tilted mix, downside was visible:
Cannabis stocks steal the spotlight: health care jumps nearly 9%
The standout theme on the TSX Friday was the explosive move in cannabis-linked names, which pushed the health care sector up 8.9%. [12]
At the center was Curaleaf, which surged 37.8%, after a report said U.S. President Donald Trump is expected to push for dramatically looser federal marijuana restrictions. [13]
Reuters separately reported that the policy direction under discussion could include reclassifying marijuana as a Schedule III drug, a shift that investors see as potentially meaningful for:
- compliance and regulatory risk,
- tax treatment,
- banking and capital access,
- and broader institutional participation in the industry. [14]
This cannabis-driven rally helped keep the overall Canadian market decline relatively contained compared with the day’s heavier selling pressure in parts of the U.S. tech complex.
Wall Street’s tech selloff sets the tone: AI “bubble” worries return
Canadian tech stocks didn’t sell off in a vacuum. The mood in North America turned more risk-off as U.S. markets slid from record levels on renewed debate over AI valuations.
On Friday, U.S. stocks posted their worst day in roughly three weeks, with:
- S&P 500: -1.1% to 6,827.41
- Nasdaq Composite: -1.7% to 23,195.17
- Dow: -0.5% to 48,458.05 [15]
Reuters tied the pressure to Broadcom and Oracle-related concerns that reignited fears of an “AI-fueled bubble,” alongside rising long-term borrowing costs. [16]
The important read-through for Canada: when U.S. tech sells off hard, TSX technology names — particularly those seen as AI infrastructure beneficiaries — can get hit even if Canada’s commodity-heavy sectors are holding up.
The loonie, rates, and bonds: Canadian dollar posts a third straight weekly gain
Beyond equities, Friday also brought a notable currency narrative. The Canadian dollar notched its third consecutive weekly gain, supported by expectations that Canadian and U.S. central banks may diverge next year.
Reuters reported the loonie was around 1.3765 per U.S. dollar, up 0.4% on the week, as investors increasingly price that the Bank of Canada may be finished cutting (and could even raise rates in the second half of 2026), while the Fed is expected to continue easing. [17]
Supporting data points cited in the Reuters report included:
- Wholesale trade (Oct): +0.1%
- Building permits (Oct): +14.9%
- Capacity utilization (Q3): 78.5% [18]
In rates:
- Canadian bond yields were mixed, with the 10-year yield around 3.453%. [19]
For Canadian equities, the takeaway is nuanced:
- A firmer loonie can be a headwind for exporters’ translated earnings,
- but stable-to-higher domestic growth signals can support banks and cyclicals,
- while a dovish Fed backdrop can still provide liquidity support for risk assets.
Commodities check: copper near $12,000 adds fuel to the TSX’s resource narrative
Commodity strength remains a defining pillar of Canada’s 2025 market story, and Friday brought a fresh reminder in industrial metals.
Reuters reported copper has surged nearly 35% in 2025, pushing toward $12,000 per metric ton, driven by:
- tight supply conditions,
- rising demand tied to data centers powering AI,
- and broader electrification/energy-transition needs. [20]
The same report highlighted expectations for continued supply tightness, with projected deficits of 124,000 tons in 2025and 150,000 tons in 2026, alongside disruptions and production constraints. [21]
Why it matters for TSX investors:
- The TSX has a meaningful weighting in materials and mining, and
- copper’s AI-linked demand narrative is increasingly overlapping with the market’s broader “AI investment cycle” story — but through resources, not just semiconductors.
Oil was softer into the weekend, with Reuters noting crude settled about 0.3% lower at $57.38 a barrel in the context of oversupply concerns and macro headlines. [22]
Canada market forecast: Monday CPI is the next major catalyst
Looking ahead, Canadian macro data could become the next market-moving variable — particularly for rate expectations and the Canadian dollar.
Reuters reported that Canada’s November CPI, due Monday, is expected to show inflation at 2.3% year-over-year, up slightly from 2.2% in October, but still near the Bank of Canada’s 2% target. [23]
What CPI could change next week:
- Hotter-than-expected inflation: could revive “higher-for-longer” concerns and pressure rate-sensitive sectors (real estate, utilities) while supporting the loonie.
- In-line or cooler print: could reinforce the soft-landing narrative, potentially aiding equities — but also keeping the rotation theme alive if investors continue to fade high-multiple tech.
Globally, Reuters’ “Take Five” preview underscored a busy calendar and lingering cross-asset sensitivity to rates, policy, and growth signals — conditions that tend to amplify market swings around big data releases. [24]
Bottom line: Canada’s TSX cools off, but the 2025 playbook stays intact
Friday’s close delivered a clear message: the TSX is still acting like a market supported by commodities and rate relief — but vulnerable to global tech sentiment. The index’s 0.4% decline was driven by a sharp tech selloff, even as health care surged on a cannabis-policy catalyst and the broader market held onto a weekly gain. [25]
As traders look to next week, the spotlight shifts to Canada’s CPI on Monday, ongoing AI valuation debates spilling over from Wall Street, and commodity price signals — especially copper — that increasingly shape the TSX’s relative strength narrative. [26]
References
1. www.tradingview.com, 2. www.tradingview.com, 3. www.tradingview.com, 4. www.reuters.com, 5. www.tradingview.com, 6. www.tradingview.com, 7. www.tradingview.com, 8. www.tradingview.com, 9. www.reuters.com, 10. www.tradingview.com, 11. www.tradingview.com, 12. www.tradingview.com, 13. www.tradingview.com, 14. www.reuters.com, 15. apnews.com, 16. www.reuters.com, 17. www.reuters.com, 18. www.reuters.com, 19. www.reuters.com, 20. www.reuters.com, 21. www.reuters.com, 22. www.reuters.com, 23. www.tradingview.com, 24. www.reuters.com, 25. www.tradingview.com, 26. www.tradingview.com
