Canada’s S&P/TSX Composite index was lower in late-morning trading Tuesday, weighed down by a sharp slide in energy names as crude prices weakened on renewed optimism around Russia–Ukraine peace talks. At around 11:26 a.m. ET, the benchmark was about 31,324 points, down roughly 0.5% on a delayed quote—putting the TSX on pace for a third straight daily decline, even after a powerful 2025 run that has left the index up about 26.7% year to date.
With the closing bell still hours away (4:00 p.m. ET), investors are navigating a market that is increasingly headline- and data-driven—with fresh U.S. macro numbers landing today, commodities resetting lower, and Bank of Canada Governor Tiff Macklem scheduled to speak later in the session.
Why the TSX is down: Energy shock meets global “risk-off” positioning
The single biggest drag on the Toronto Stock Exchange today has been energy, which fell sharply as oil prices slid and the market repriced near-term supply and demand expectations. Reuters reported the TSX’s energy group down around 3% in morning trade as crude sank below $60 on strengthening optimism about a Russia–Ukraine peace deal.
Oil’s pullback is being reinforced by a mix of geopolitics and softer macro signals:
- Brent crude and WTI were lower on the day as peace-talk optimism fed the idea of easier global supply dynamics.
- Weak Chinese data also added pressure—Reuters pointed to slowing factory output and softer retail growth in China as another factor weighing on the oil complex.
- Separately, the Financial Times highlighted growing market focus on oversupply risks and cited an International Energy Agency view pointing to a sizable potential surplus in 2026.
Because the TSX is heavily exposed to commodities and resource producers, a fast oil downdraft can outweigh more constructive pockets elsewhere—especially during December positioning when investors are prone to lock in gains.
The biggest bright spot: Cannabis stocks jump on U.S. reclassification talk
While oil dragged, cannabis stocks were a rare source of upside momentum.
Reuters flagged notable gains for cannabis names after U.S. President Donald Trump said he’s considering an executive order to reclassify marijuana as a less dangerous drug—an update that helped extend a recent rally in the group.
Adding to the cannabis narrative today, Organigram (TSX: OGI) reported record fiscal results in a release carried by Business Wire—another data point supporting investor interest in the sector as regulatory expectations shift.
Key TSX stock stories moving the tape today
Beyond the index-level energy pressure, a handful of corporate headlines are drawing investor attention:
WSP Global’s $3.3B deal for TRC Companies
Engineering and services firm WSP Global announced an all-cash agreement to buy U.S.-based TRC Companies for $3.3 billion, a move Reuters said is tied to rising power-sector demand—partly driven by energy usage growth linked to AI data centers. The transaction is expected to close in Q1 2026.
NFI Group spikes on battery recall agreement
NFI Group surged after announcing a battery recall agreement that provides 75%–80% recovery against a $229 million provision, according to Reuters—an important de-risking development for a company that’s been under recall-related scrutiny.
Enghouse: revenue miss in focus
Software firm Enghouse posted fourth-quarter revenue that came in below analyst estimates, a point flagged in Reuters’ pre-market TSX coverage—another reminder that stock-specific fundamentals are still driving dispersion beneath the index surface.
Macro backdrop: U.S. data drops, and rate-cut expectations shift again
Today’s TSX tone isn’t just about oil—it’s also about how investors interpret U.S. growth, inflation, and the Fed’s next moves.
U.S. jobs: payrolls rebound, unemployment rises to 4.6%
Reuters reported U.S. nonfarm payrolls rose by 64,000 in November, rebounding from an October decline, while the unemployment rate increased to 4.6%—a level Reuters noted was influenced by data distortions tied to the earlier government shutdown.
Rate markets: odds of a January cut rise, but timing still debated
Following the jobs report, Reuters noted U.S. rate futures briefly lifted the implied odds of a January cut before settling lower, while still broadly pricing two 25-basis-point cuts in 2026 with the first cut most likely later in the year.
Retail sales: flat headline, stronger “core”
U.S. retail sales were unexpectedly unchanged in October, but Reuters highlighted that the so-called core measure (closer to GDP-consumption tracking) rose strongly—one more mixed signal that markets are attempting to reconcile.
Business surveys: growth cools into year-end
Separately, Reuters reported that U.S. business activity growth slowed in December to the weakest pace since June, while input price pressures ticked higher—an uncomfortable combination if inflation reaccelerates just as growth moderates.
For Canadian equities, this matters because Fed expectations ripple through:
- global risk appetite,
- commodity pricing,
- and FX/financial conditions that influence Canadian banks and cyclicals.
Bank of Canada in focus: Macklem’s remarks could be a late-day catalyst
Another TSX-moving event to watch today is Governor Tiff Macklem’s speech. The Bank of Canada’s event notice says remarks will be published at 12:45 p.m. ET, and markets will be listening closely for how the BoC frames Canada’s resilience and risks into 2026.
Investors are also looking ahead to Canada’s next key domestic datapoint: October retail sales, due Friday, Dec. 19 (8:30 a.m. ET), per Scotiabank’s December release calendar.
“After the bell” checklist: what could change the TSX narrative by 4 p.m.
With several moving parts already in play, here are the catalysts most likely to matter between now and the close:
- Oil’s next move: If crude stabilizes (or extends the slide), TSX energy will likely dictate whether the index can claw back losses or sinks to another weekly low.
- BoC headline risk: Any nuance in Macklem’s tone around growth, inflation persistence, or trade-related pressure could spill into banks, interest-rate sensitives, and the Canadian dollar.
- U.S. rates reaction: A deeper drop in yields typically supports rate-sensitive sectors, while a bounce in yields can reinforce the “higher-for-longer-ish” narrative that’s been challenging equity multiples at the margin. Reuters
- Cannabis momentum: Regulatory headlines can move the group quickly; traders will watch whether today’s gains hold into the close or fade like a typical headline spike.
- Deal and single-stock follow-through: WSP, NFI, and earnings-linked movers could remain active as investors digest deal math and updated guidance.
Outlook: the 2025 rally is real—now valuation and 2026 narratives are taking over
Even with today’s pullback, the TSX remains on track for its best year since 2009, helped by easier monetary policy and strong commodity trends earlier in the year, per Reuters.
Going into year-end, two big forward-looking themes are colliding:
- AI as a durable investment driver: Reuters reported that major brokerages expect AI to remain central to 2026 strategies—supportive for broader equity sentiment, though also a source of volatility when tech leadership wobbles.
- Commodities at an inflection point: Oil’s weakness today underscores how quickly macro and geopolitics can reshape the earnings outlook for Canada’s commodity-heavy market.
Meanwhile, Canada’s resource-and-industrials complex continues to see structural stories—like Ottawa’s approval of the Anglo American–Teck Resources merger, which the Financial Times framed as a major copper-focused deal aligned with long-run electrification demand.
Bottom line: As of late morning in Toronto, the TSX is being pulled in opposite directions—energy weakness vs. cannabis strength, with macro data and central bank messaging setting the tone for how investors want to be positioned into the close and into year-end.
