TSX Climbs to Fresh Highs as Commodity Bulls Dominate the Week

The S&P/TSX Composite Index (^GSPTSE) closed at 25,357.74 on May 10, 2025, marking its highest level since February 28 and extending its fifth consecutive weekly gain with a 1.3% rise. This resilience was fueled by surging commodity prices, corporate outperformance, and cautious optimism around easing trade tensions, even as Canada’s unemployment rate hit a 6.9% high amid tariff-related economic headwinds.

Commodity Bulls Lead the Charge

The energy and materials sectors were the primary drivers of the TSX’s gains, with oil and metals prices surging amid mixed macroeconomic signals.

• Energy Sector: The S&P/TSX Capped Energy Index rose 2.0%, propelled by a 3.2% jump in Brent crude to $59.91/barrel. This followed optimism that U.S.-China trade talks might ease tariff pressures, though lingering uncertainty persisted.
• Materials Sector: The sector surged 2.8%, driven by climbing gold and copper prices. Gold’s safe-haven appeal—bolstered by geopolitical tensions—pushed the S&P/TSX Global Gold Index 3.3% higher, while copper futures held near $4.60/lb amid constrained supply and electrification demand.

Corporate Highlights: Winners and Losers

Individual stocks amplified the TSX’s gains, with standout performances in aviation, telecom, and tech offsetting broader sector declines:

• Air Canada (AC.TO): Shares soared 14.6% after the airline reported a narrower-than-expected quarterly loss and announced a C$500 million buyback program. This marked a critical recovery for an industry still grappling with post-pandemic volatility.
• Telus Corp (TU.TO): Telecom giant Telus rose 7.1% following better-than-expected earnings, defying a 1.5% dip in the broader tech sector.
• TD Bank (TD.TO): The financial sector faced headwinds, with TD’s shares dropping 1.6% due to a $615 million U.S. anti-money laundering charge.

Economic Crosscurrents: Trade Tensions vs. Rate Cut Hopes

While commodity-linked sectors thrived, Canada’s economy faced challenges. The April unemployment rate rose to 6.9%, its highest since November 2024, reflecting tariff impacts on export-reliant industries. Investors, however, priced in a 67% probability of a Bank of Canada rate cut by June 2025—a stark contrast to the 46% likelihood before the April jobs report.

The Canadian 10-year bond yield fell to 3.159%, supporting the real estate sector (+0.5%) as borrowing costs eased. Yet, trade uncertainties lingered: U.S. President Donald Trump’s mention of an “80% tariff on China” contrasted with hopes for reduced levies, creating a volatile backdrop for investors.

Conclusion: TSX’s Momentum Faces a Delicate Balance

The TSX’s 25,357.74 close underscores its ability to navigate mixed signals, with commodities and select stocks propelling gains. Year-to-date, the index has risen 5.93%, outperforming earlier 2024 forecasts of 22,075.28 by Q2 2025 and 21,458.00 by mid-2026.

However, risks remain. While gold’s ascent to $3,330–$3,360/oz and oil’s rebound highlight investor demand for tangible assets, Canada’s economic softness—exemplified by the 6.9% unemployment rate—cannot be ignored. The Bank of Canada’s potential rate cut and trade negotiations will be pivotal in sustaining this momentum.

For investors, the TSX’s performance reflects a market betting on commodity-driven resilience and central bank support, even as global growth slows. The path forward hinges on whether trade tensions ease further and whether Canada’s economy can rebound from tariff-driven strains.

In this environment, the TSX’s rally is both a testament to commodity strength and a reminder of the fragile equilibrium between optimism and caution.