Canadian Stocks Slip As Investors Exercise Caution

(RTTNews) - Canadian stocks slipped on Tuesday as traders held back from taking big steps as markets wait to see the rate cut decisions by central banks in Canada and the U.S.

After opening just above yesterday's close, the benchmark S&P/TSX Composite Index lost momentum within an hour and traded firmly negative throughout the session before settling at 31,049.28, down by 52.50 points (or 0.17%).

Two of the 11 sectors posted gains today, with the financials sector leading the pack.

The tripartite Canada-U.S.-Mexico Agreement (CUSMA) (a free-trade deal) is up for review next year.

In August, U.S. President Donald Trump slapped heavy tariffs on Canadian exports to the U.S. that do not fall under CUSMA. In addition, Trump has halted trade deal negotiations with Canada.

Canada is now left to suffer the whopping levies, which are already squeezing the domestic automobile, steel, aluminum, and soft lumber industries.

To restore the economy and increase investor confidence, Canadian Prime Minister Mark Carney is taking vigorous measures to steer away from the U.S. for defense and economic relations.

Yesterday, Canada joined a multibillion-dollar European Union defense fund program, Security Action for Europe (SAFE). Carney stated that Canada's participation in SAFE would help fill key capability gaps and expand markets for Canadian suppliers.

The $170 billion SAFE rearmament fund has been established by the European member nations after Russia's aggression in Ukraine.

On October 29, the Bank of Canada reduced its target for the overnight rate by 25 basis points to 2.25%, with the bank rate at 2.5% and the deposit rate at 2.20%.

The second quarter GDP data showed a marked contraction of 1.8%.

Recent economic releases by Statistics Canada revealed that the real GDP rose 2.6% on an annualized basis for the third quarter, well-above the central bank's expectations.

Technically, though Canada has avoided a recession in the third quarter, these prints have dampened the spirit of investors about another rate cut in December by BoC. The central bank is set to announce its interest rate decision on December 10.

Meanwhile in the U.S., news reports hinting at Kevin Hassett becoming the successor to Jerome Powell as the next Federal Reserve Chair has been welcomed by money markets. Hassett is a well-known supporter of a low-interest rate regime.

Gains in financial and technology stocks were offset by mining stocks in the materials sector, which bore the brunt of weaker gold prices and consequently pulled down the index as well.

On the business front today, the Bank of Nova Scotia (or Scotiabank) posted the fourth quarter 2025 earnings and revenue with quarterly earnings of $1.39 per share and posted revenues of $7.06 billion for the quarter ending 2025. Over the last four quarters, the lender surpassed consensus EPS estimates three times. The bank's net income for the three months ending October 31 was $2.2 billion.

Investors are anticipating results from the rest of the big six Canadian banks - Royal Bank of Canada, TD Bank, BMO, CIBC and National Bank.

Major sectors that lost in today's trading were Consumer Staples (1.29%), Healthcare (1.41%), Energy (1.59%), and Materials (1.81%).

Among the individual stocks, Ssr Mining Inc (3.50%), Triple Flag Precious Metals Corp (3.14%), Kinross Gold Corp (3.13%), Imperial Oil (3.51%), Advantage Oil & Gas Ltd (3.21%), and Curaleaf Holdings Inc (4.42%) were the notable losers.

Major sectors that gained in today's trading were Financials (0.70%) and Information Technology (0.29%).

Among the individual stocks, Laurentian Bank (18.39%), Energy Fuels Inc (6.97%), Bank of Nova Scotia (2.80%), National Bank of Canada (1.79%), Canadian Imperial Bank of Commerce (1.48%), Shopify Inc (4.90%), and Docebo Inc (3.37%) were the prominent gainers.