Canada's primary stock market, the S&P/TSX Composite Index, soared to a historic peak on Friday, December 19, fueled by a renewed wave of investor optimism and strong performances in the technology and materials sectors.
Market Reaches Unprecedented Levels
The benchmark index closed the trading session with a robust gain of 314.92 points, or 1%, settling at a record 31,755.77. This milestone eclipsed its previous closing high set just over a week earlier on December 11. Trading volume was notably heavy, underscoring the strong conviction behind the move.
For the week, the TSX advanced 0.7%, contributing to an impressive yearly rally. Since the start of 2025, the index has surged by 28.4%, positioning itself for its most significant annual gain since 2009.
Sectors Leading the Charge
The rally was broad-based, with several key sectors posting substantial gains. The materials group, which includes metal miners and fertilizer companies, jumped 2.4%. This surge was supported by rising prices for commodities like copper and gold.
"Gold is still having a great year and that's setting up again for positive returns next year," noted Greg Taylor, Chief Investment Officer at PenderFund Capital Management.
Similarly, the technology sector added 2.5%, despite a sharp 14.1% drop in shares of BlackBerry Ltd following its quarterly results. The energy sector also climbed 1%, buoyed by a 0.9% rise in oil prices, which settled at $56.66 a barrel. The heavyweight financials sector ended the day 0.7% higher.
Drivers Behind the Rally
Market experts attribute the bullish sentiment to a combination of supportive monetary policy and anticipated fiscal stimulus. "It feels like we're back to a risk-on mode," Taylor observed. "The earnings outlook looks ok and it's hard to be really bearish when the economy is actually doing ok, you've got rate cuts, you've got governments that are trying to stimulate the economy."
The Bank of Canada has reduced its benchmark interest rate to a three-year low of 2.25%. Concurrently, the government, under Prime Minister Mark Carney, has committed to spending billions on productivity-enhancing measures and aims to accelerate the construction of natural resource projects.
While Canadian retail sales saw a slight dip of 0.2% in October, a preliminary estimate pointed to a strong 1.2% rebound in November, adding to the positive economic narrative. The rally in Toronto mirrored gains on U.S. exchanges, where optimism around artificial intelligence (AI) shares was reignited.
