Canadian Stocks Rise Modestly As Investors Play It Safe

(RTTNews) - Canadian stock market posted modest gains on Tuesday as investors switched to "play-it-safe" mode ahead of key economic numbers later this week. Markets remained closed yesterday due to Labor Day Holiday.

After moving notably lower early in the session, the benchmark S&P/TSX Composite Index regained ground over the course of the session and ended the day at a new record closing high of 28,615.62, up by 51.17 points (or 0.18%).

Domestic growth data released last week gave rise to expectations of a rate cut by Bank of Canada. Notably, GDP for the second quarter of 2025 ended on June 30 contracted by 1.6%.

With the current rate remaining at 2.75% since March 2025, Bank of Canada's next "key" interest rate (the overnight rate) announcement is scheduled for September 17. This will coincide with the release of the Monetary Policy Report, which will provide inputs on inflation and economic growth.

In the US, markets digested a ruling from the US Court of Appeals for the Federal Circuit late last Friday that ruled that most of the tariff levies by the US President Donald Trump on its trading partners are illegal and that only the Congress held the authority to pass the duties.

However, the court has allowed the tariffs to remain in place while the US government is heading to appeal the verdict in the Supreme Court.

This development has led to new tariff uncertainty among various nations trading with the US, many of which have concluded tariff deals.

Slapped with 35% tariffs (from August 1) by the US on Canadian exports that do not fall under the CUSMA, Prime Minister Mark Carney is fighting hard to arrive at a middle ground for smoother US-Canada trade.

That aside, Canada is aggressively exploring marketplaces outside the US for all its exports.

Data-wise, today was uneventful except for the S&P Global Canada Manufacturing PMI, which rose to 48.3 in August from 46.1 in July, though it continued to reflect a contraction in Canadian private-sector factory activity. Manufacturing suffered a seventh consecutive month of contraction, with business dented by the US tariffs.

Analysts are looking forward to Canada's latest job numbers, which are due to be released this Friday. A contraction or decline could increase the certainty of a rate cut in September.

In the US, traders anticipate US non-farm payrolls due on Friday, which could impact the US Fed's decision on interest rates.

Major sectors that gained in today's trading were Materials (1.75%), Healthcare (1.41%), Energy (0.91%), and IT (0.19%).

Among the individual stocks, Torex Gold Resources Inc (10.98%), Aya Gold and Silver Inc (9.60%), Brp Inc (6.32%), First Majestic Silver Corp (5.49%), Bausch Health Companies Inc (4.13%), and Quarterhill Inc (13.89%) were the prominent gainers.

Major sectors that lost in today's trading were Communication Services (0.48%), Consumer Staples (0.51%), Consumer Discretionary (0.92%), and Real Estate (1.45%).

Among the individual stocks, BCE Inc (1.72%), Maple Leaf Foods (2.74%), Golden Activewear (3.56%), and Canadian Tire Company (2.49%) were the notable losers.