Canadian Stocks Held Ground Amid US Fed Rate Cut Expectations

(RTTNews) - Canadian stocks posted incremental gains on Thursday, after yesterday's record high close, as expectations of U.S. Federal Reserve rate cut gathers more steam while profit taking from recent gains cut halted the momentum briefly earlier in the session.

After opening a little lower than yesterday's close, today the benchmark S&P/TSX Composite Index renewed energy within an hour to trade positive throughout the session before settling at 31,196.71, up by 16.46 points (or 0.05%).

Today in the U.S., markets remain closed on account of Thanksgiving Day.

The U.S. Federal Reserve's monetary policy meeting is slated for December 9-10.

Yesterday, reports that hinted White House National Economic Council Director Kevin Hassett emerging as the frontrunner for next Fed Chair, cheered the markets as Hassett is a "pro rate cut" votary.

Recent U.S. economic data releases indicate a softening job market.

Three U.S. Federal Reserve officials reaffirmed their preference for lowering the interest rates early this week.

As these developments accelerated expectations of a Fed rate cut, yesterday in Canada, the index settled at a record closing high of 31,180.25.

Today, the Current Account Deficit numbers released by Statistics Canada showed that CAD narrowed by C$11.9 billion to C$9.7 billion in the third quarter of 2025.

The goods and services deficit fell from C$19.1 billion in the second quarter to C$10.6 billion.

Goods exports rose 1.8% to C$186.0 billion while goods imports fell 2.0% to C$197.1 billion.

The services balance transitioned from a C$0.7 billion deficit to a C$0.5 billion surplus, aided by a larger commercial services surplus and a lesser transportation deficit.

The investment income surplus widened by C$2.9 billion to C$7.0 billion amid higher direct investment income.

Further, the average weekly earnings of nonfarm payroll employees in Canada increased by 3.1% year-on-year to $1,317.09 in September.

Even as the tariff war with the U.S. continues, yesterday the former Bank of Canada Governor Stephen Poloz stated that the BoC is in "risk management mode" due to the stagflation shock experienced after the trade war began.

On October 29, the Bank of Canada cut its policy rate by 25 basis points, bringing the rate down to 2.25%. At that time, the central bank Governor Tiff Macklem indicated that as the endpoint of the BoC easing cycle.

Expectations for another rate cut in December now remains subdued.

Canada's unemployment rate fell in October but continues to stay elevated at 6.9%.

The central bank had forecast that the Canadian economy is expected to grow by 0.5% in the third quarter despite the second quarter showing a contraction.

In August, the GDP suffered a 1.6% decline in the second quarter of 2025.

Analysts are awaiting Friday's release of GDP reports, along with the numbers for September and the third quarter of 2025 to gather more understanding of the country's financial health.

If the GDP growth is negative for the second quarter in a row, it could indicate that the country is suffering a "recession" which may be unfavorable for the markets in the short-term.

Major sectors that gained in today's trading were Information Technology, Real Estate, Energy, and Communication Services.

Among the individual stocks, Bitfarms Ltd, Firan Technology Group, Sangoma Technologies, and Vermillion Energy Inc were the prominent gainers.

Goeasy Ltd, Mda Ltd, and Bombardier Inc were among the prime market-moving stocks today.