Rate Cut Expectations Propel TSX Stocks to Buy as Canadian Market Hits Fresh Highs

The S&P/TSX Composite Index delivered solid gains on Friday, closing at 31,382.78—a new record high marking a 0.60% advance or 186.07 points. The momentum reflected broad market optimism centered on anticipated monetary easing from south of the border.

Fed Pivot Fuels Investor Appetite

Market participants are increasingly confident about an imminent interest rate reduction from the U.S. Federal Reserve. The CME FedWatch Tool currently shows traders assigning an 86.9% probability to a quarter-point cut at the December 9-10 meeting. This sentiment has been bolstered by recent remarks from Fed officials. New York Fed President John Williams delivered dovish commentary last Friday, while Board members Michelle Daly and Christopher Waller have both signaled that additional rate cuts remain justified before year-end. Meanwhile, political pressure continues as President Trump and Treasury Secretary Scott Bessent have repeatedly called for lower borrowing costs, with Kevin Hassett emerging as a potential successor to Fed Chair Jerome Powell when his term expires in May.

Economic Data: Mixed Signals for Canadian Growth

Statistics Canada released third-quarter GDP figures showing a robust 2.6% annualized expansion, substantially exceeding the 0.5% forecast. On a quarterly basis, growth reached 0.6%, recovering from a revised 0.5% contraction. This marks the year’s strongest performance. However, October flash estimates revealed a monthly contraction of 0.3%, with both goods-producing and services sectors showing weakness.

Prime Minister Mark Carney has begun implementing policies to shield the economy from potential tariff impacts, including an energy accord with Alberta’s premier. Officials project U.S. tariffs could eliminate $50 billion from Canada’s economic output.

Sector Winners and Individual Stock Movers

Materials, Energy, and Financials led sector gains, with silver miners Aya Gold and Silver, Endeavor Silver, and First Majestic Silver among notable winners alongside Vermilion Energy. The outperformance in these sectors reflects investor appetite for inflation-hedge assets amid rate-cut expectations.

Conversely, Healthcare and Consumer Discretionary underperformed, with Aritzia, Gildan Activewear, Dollarama, and Sienna Senior Living recording losses.

Corporate Earnings Highlight

Zoomd delivered encouraging third-quarter results with net earnings reaching $3.8 million, up 20% year-over-year. The company reported revenues of $16.1 million, with operating expenses declining 5% to $3.2 million and adjusted EBITDA of $4 million. Earnings per share stood at C$0.06, underscoring margin resilience despite economic headwinds.

For investors scanning tsx stocks to buy, the combination of favorable Fed expectations, recovered GDP growth, and selective corporate strength presents a compelling backdrop for market positioning.