Canadian Stocks Dip Amid Rate Cut Expectations, Profit-Taking

(RTTNews) - Canadian stocks sheds value modestly on Friday as investors resorted to profit-taking from the recent record highs this week amid increasing expectations of a possible rate cut by the Bank of Canada next week.

After opening just lower than yesterday's close, the benchmark S&P/TSX Composite Index fell to an intraday low of 29,254.37 in the early afternoon. The index subsequently managed to regain some ground before closing at 29,283.82, down by 124.07 points (or 0.42%).

Four of the 11 sectors posted gains today, with the healthcare sector leading the pack.

Being hit by 35% tariffs by US President Donald Trump for Canadian exports to the US from August 1, Canadian Prime Minister Mark Carney is strategically working on measures to build the nation's economy both domestically and externally.

The government's upcoming budget is expected to carry a slew of austerity measures across all departments.

Earlier this month, Carney launched a $3.6 billion fund to support tariff-hit industries.

Carney had also ordered the public sector to "Buy Canadian" in order to cut off the nation's reliance on the US solely as a trade partner.

Carney's cabinet is exploring marketplaces outside the US for bilateral trade agreements for its exports.

Yesterday, Carney announced the first series of nation-building projects being referred to the Major Projects Office (MPO) for consideration. Placed on a fast-track approval, these projects are expected to generate more than $60 billion for the Canadian economy and create tens of thousands of high-paying careers for Canadian workers.

Data released by Statistics Canada today revealed that Canadian industrial capacity utilization (i.e., the percentage of actual to potential output), declined to 79.3% in Q2 of this year from a downwardly revised 79.9% from Q1 of 2025.

In the US, CPI and PPI numbers released this week along with job numbers hinted at an increasing possibility for a rate cut at the Federal Reserve's monetary policy meeting next week.

The labor force survey for August showed Canada lost nearly 66,000 jobs. In addition, a contraction of 1.6% in economic activity was observed in the last quarter data.

As the current overnight rate stands at 2.75%, mirroring the US, anticipation of a rate cut by the BoC is now on the radar of analysts.

The US administration is battling in the US Supreme Court over the validity of "reciprocal tariffs" after they were deemed "illegal" by an appeals court on August 29. The Supreme Court has agreed to a fast-track hearing of the appeal, with arguments set to begin in the first week of November.

Even as Canadian officials were involved in high-level talks with their US counterparts for a streamlined Canada-US trade relation, this legal development has slammed the brakes harder on negotiations as the "tariff agenda" now hinges on the Supreme Court's final ruling.

Major sectors that gained in today's trading were Healthcare (0.79%), Utilities (0.39%), Energy (0.17%), and Communication Services (0.11%).

Among the individual stocks, Sienna Senior Living Inc (1.22%), Capital Power Corp (2.44%), Brookfield Renewable (1.18%), and Nuvista Energy (3.03%) were the prominent gainers.

Major sectors that lost in today's trading were Industrials (0.55%), Consumer Staples (0.65%), IT (0.77%), and Consumer Discretionary (0.84%).

Among the individual stocks, Gildan Activewear (2.33%), Aritizia Inc (1.40%), Descartes Sys (2.30%), and Sylogist Ltd (2.09%) were the notable losers.