Canada’s stock market cooled slightly by early afternoon on Monday, with the S&P/TSX Composite Index drifting just below record territory as investors turned their focus squarely to this week’s central‑bank decisions in Canada and the United States.
By late morning, around 12:40 p.m. ET, the S&P/TSX Composite was down about 44 points, trading near 31,268, as losses in telecom, utilities and energy weighed on the benchmark, while U.S. markets were also modestly lower. CityNews Halifax That pullback leaves the index only a short distance from last week’s record close around 31,542, after a year in which Canadian equities have delivered roughly 25–27% total returns, putting the TSX among the stronger performers in developed markets. TechStock²
TSX Midday Snapshot: Slightly Lower, Still Near Highs
Index level and move
- S&P/TSX Composite: around 31,270, down roughly 0.1–0.2% versus Friday’s close, based on late‑morning data from The Canadian Press and intraday quotes. CityNews Halifax
- Intraday range: trading in a narrow band around 31,300, oscillating between small gains and losses as the session progressed. TradingView
A brief morning note from Reuters showed futures on the TSX essentially flat before the open, as traders waited for Wednesday’s Bank of Canada (BoC) rate decision and a widely expected U.S. Federal Reserve cut later this week. TradingView
Trading Economics, via TradingView, described the market as “swinging between gains and losses” around the 31,310level, with sector performance split between weak energy names and firmer technology stocks. TradingView
Taken together, the data suggest that by roughly 1 p.m. ET, the Canadian benchmark was modestly in the red but still effectively holding near record highs, with investors reluctant to make big directional bets ahead of central‑bank headlines.
Sector Check: Energy and Utilities Weigh, Tech and Industrials Help Limit Losses
Defensives and energy under pressure
According to a mid‑day update from The Canadian Press, the TSX’s decline was led by telecom, utilities and energy, which were the primary drags on the benchmark in late‑morning trade. CityNews Halifax
A separate intraday summary from Trading Economics fleshes out the picture: TradingView
- Energy led the downdraft, with Enbridge down more than 1% and Imperial Oil and Cenovus Energy off around 1% as crude prices slipped over 1% on the day.
- Large miners also traded lower, adding pressure to the materials complex.
This pullback in resource and defensive stocks fits with global risk sentiment on Monday, where markets broadly edged lower ahead of the Fed and BoC meetings and as commodity prices cooled slightly. Morningstar
Technology and industrials provide a cushion
On the positive side, the same Trading Economics note highlighted technology as a clear bright spot: TradingView
- Shopify, Constellation Software and Celestica were each up roughly 1–2.5%, helping to offset weakness in energy and materials.
Earlier Baystreet.ca commentary (in a piece titled “TSX Slides by Noon”) also pointed to industrials and information technology as rare gainers by mid‑session, while financials were roughly flat. Yahoo Finance
That pattern reinforces a theme that has become familiar in 2025:
- Old‑economy sectors like energy and traditional miners still dominate index weightings.
- Growth and AI‑linked tech names have become increasingly important swing factors when commodities take a breather. TechStock²
Macro Backdrop: BoC and Fed Take Centre Stage
Bank of Canada: likely on hold at 2.25%
Pre‑market coverage from Reuters reported that TSX futures were flat as traders looked ahead to this Wednesday’s BoC announcement and the Fed’s decision later in the week. TradingView
Key points from that coverage and recent macro data:
- The BoC policy rate sits at 2.25% after a series of cuts totalling about 275 basis points from its prior peak. TechStock²
- A Reuters poll shows nearly all economists expecting the bank to hold rates steady this week, with markets increasingly assuming no further cuts and the next move being a hike sometime in 2026. TradingView
- Strong November labour data — roughly 53,600 jobs added and unemployment at a 16‑month low — has reinforced the view that the BoC can pause comfortably, supporting a firmer Canadian dollar. Reuters
U.S. Federal Reserve: widely expected cut, unclear 2026 path
The same futures note and Trading Economics coverage highlighted that: TradingView
- Markets are pricing a quarter‑point Fed cut this week.
- However, there is considerable uncertainty about the 2026 rate path, which is keeping global risk appetite somewhat restrained despite recent equity strength.
For Canadian stocks, that combination — a BoC likely on hold and a Fed edging toward easier policy — creates a nuanced backdrop:
- Banks and domestic cyclicals tend to benefit from steady local rates and a resilient labour market.
- Rate‑sensitive growth names may face a ceiling on valuation expansion if investors come to expect a more hawkish global stance in 2026 than is currently priced into markets.
2025 Scorecard: TSX Quietly Outperforms
Even with today’s small pullback, the Canadian market heads into year‑end with a remarkably strong run behind it:
- A recent analysis cited by TechStock² estimates the S&P/TSX Composite has returned about 25% over the last year, with total returns near the top of the developed‑market pack. TechStock²
- Another piece looking at TSX growth companies notes that the index has climbed roughly 27% in local currencyas 2025 draws to a close. Yahoo Finance
- Reuters reported Friday that the TSX ended at 31,311.41, down just 0.5% on the day and 0.2% for the week, after setting a record closing high the prior session. Reuters
Strategists at firms such as RBC Wealth Management and National Bank Investments, as summarised in recent outlook pieces, generally describe Canada as constructively positioned heading into 2026:
- The TSX still trades at a discount to U.S. valuations, despite its strong run.
- Financials, materials and energy account for a large share of 2025’s total return contribution, particularly thanks to record gold prices and solid bank earnings. TechStock²
Their tone is positive but measured: expectations for another year of outsized gains are tempered by concerns about global rate policy, lingering trade tensions and the risk of profit‑taking after a multi‑year rally. TechStock²
Stock‑Specific Headlines Moving Canadian Names
While index‑level moves are modest, several notable corporate stories are helping shape sector sentiment today.
Maple Leaf Foods: special dividend boosts staples
Food processor Maple Leaf Foods (TSX: MFI) announced a special cash dividend of $0.60 per share, totalling about $75 million, payable on December 19 to shareholders of record on December 15. Mapleleaffoods
The move underscores:
- Management’s confidence in the balance sheet.
- The broader cash‑return theme running through parts of the consumer and staples space after a strong year for earnings.
Transcontinental: packaging sale and shareholder payout
Transcontinental Inc. (TSX: TCL.A / TCL.B) has agreed to sell its packaging business to ProAmpac Holdings in a deal valued at roughly $2.22 billion, with plans to distribute a substantial portion of proceeds to shareholders. Stalbertgazette
A Dow Jones summary via Morningstar said Toronto stocks were edging lower overall, but Transcontinental shares surged following the announcement of the sale and proposed special distribution, making the name one of the standout gainers on the TSX in early trade. Morningstar
Lithium Americas: joining the S&P/TSX Composite
Lithium Americas Corp. (TSX: LAC) announced that its shares will be added to the S&P/TSX Composite Index effective December 22, 2025, after a recent rebalance by S&P Dow Jones Indices. Financial Times Markets
The company is advancing the Thacker Pass lithium project in Nevada — a large-scale development backed by a U.S. Department of Energy loan and strategic investment from General Motors — and its inclusion in the benchmark index is expected to improve liquidity and attract additional institutional flows. Financial Times Markets
Versamet Royalties: graduating to the main TSX
Versamet Royalties Corporation (VMET) announced it has received approval to graduate from the TSX Venture Exchange to the Toronto Stock Exchange, with its common shares set to begin trading on the TSX on December 10, 2025. TradingView
Management highlighted the move as a milestone that should enhance visibility and trading liquidity, bolstering the company’s capacity to fund royalty and streaming deals in the precious metals space. TradingView
BMO: big‑bank strength supports financials
A midday analysis from Meyka highlighted Bank of Montreal (TSX: BMO) as a key contributor to recent Canadian market gains: Meyka
- The stock was trading around C$178.24, up about 0.8% on the day.
- BMO has gained roughly 34% over the past year, with a 3.6% dividend yield and about 25% year‑to‑date price appreciation.
That performance mirrors the broader strength in Canadian banks following a strong earnings season, which Reuters previously noted saw all six major banks beat profit expectations. Reuters
Algoma Steel: job‑saving plan in focus
In industrials, Algoma Steel Inc. (TSX: ASTL) is back in the headlines after The Canadian Press reported that plans are being developed to save hundreds of the roughly 1,000 jobs previously slated for cuts as the company transitions to a new production system. CHAT News Today
Union leadership says as many as 500 jobs could be restored by the end of next year, supported by a government loan to expand capacity, though details are still being finalized. CHAT News Today The story adds a political and labour‑market dimension to what investors have largely treated as a restructuring and capital‑investment story.
Venture and Junior Mining Corner: Financing and Listings
While the large‑cap TSX benchmark commands most of the attention, there is also activity on the TSX Venture Exchange (TSXV) and in junior mining and royalty names:
- Capitan Silver Corp. (TSXV: CAPT) announced a C$20 million bought‑deal financing, underscoring the ongoing ability of precious‑metals explorers and developers to access capital late in the cycle. Yahoo Finance
- Junior gold and precious‑metals companies such as Independence Gold and Xali Gold reported financings and project updates, reflecting continued investor interest in early‑stage resource plays even as the main TSX materials sector consolidates after strong gains. TradingView
S&P Dow Jones data shows the S&P/TSX Venture Composite Index recently around 940 points, after a series of late‑November gains, but still well below its highs from earlier cycles. S&P Global This underscores how risk appetite remains more cautious in small‑cap Canada compared with the blue‑chip benchmark.
Outlook: What Today’s Moves Signal for the Rest of the Week
With the TSX still hovering near records and volatility relatively contained, Monday’s mild decline looks more like position‑squaring than the start of a deeper correction.
Based on today’s news and recent strategist commentary: TradingView
- Central‑bank guidance will be the main catalyst.
- A straightforward “on hold” message from the BoC, combined with a widely expected Fed cut, would likely validate the current equity rally without necessarily igniting another vertical leg higher.
- Any hint of earlier‑than‑expected hikes in 2026, or a more hawkish Fed tone on future cuts, could pressure rate‑sensitive sectors such as tech, REITs and leveraged growth stories.
- Sector rotation bears watching.
- If energy remains soft on weaker oil prices while gold and base metals consolidate, performance leadership may continue rotating toward financials, industrials and select technology names.
- Corporate actions — like Transcontinental’s packaging sale, Maple Leaf’s special dividend or new index inclusions such as Lithium Americas — will likely continue to produce idiosyncratic winners even in a sideways tape.
- Strategists favour quality over speculation.
- RBC, National Bank and other Canadian houses generally recommend leaning toward quality balance sheets, sustainable dividends and resilient earnings rather than chasing the hottest short‑term momentum. TechStock²
- With the TSX valued slightly above its historical average but below U.S. multiples, there is still room for earnings‑driven gains, but less room for pure multiple expansion if global risk sentiment sours. TechStock²
For investors, the takeaway from today’s session is that Canada’s equity market remains in relatively healthy shape, with modest intraday weakness reflecting caution around key macro events rather than a sharp shift in fundamentals.
Important note
This article is for news and general information purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any security. Investors should perform their own research and consider consulting a licensed financial adviser before making investment decisions.
