Canada's Stock Market Hits Record Amid Fed Rate Cut Bets Heating Up

The Canadian benchmark index delivered solid gains on Friday, climbing to an all-time closing peak as traders increasingly bet on an imminent U.S. rate reduction. The S&P/TSX Composite Index surged 186.07 points, or 0.60%, to settle at 31,382.78, maintaining bullish momentum throughout the session.

The rally kicked off against a backdrop of mounting signals from Washington. President Trump has repeatedly pressed Treasury Secretary Scott Bessent to lower interest rates, while multiple Federal Reserve officials—including New York Fed President John Williams, board member Michelle Daly, and Christopher Waller—have recently signaled openness to another rate cut before year-end. Market pricing now reflects an 86.9% probability of a quarter-point reduction when the Fed convenes on December 9-10, according to CME Group’s FedWatch Tool. This aggressive positioning suggests traders are increasingly confident the central bank will ease policy in coming weeks.

On the domestic front, Statistics Canada delivered economic data that painted a more optimistic picture than initially expected. Third-quarter GDP expanded at an annualized 2.6%—a notable rebound from the prior quarter’s 1.8% contraction and well above consensus forecasts of just 0.5%. This represented the strongest quarterly growth in Canada’s economic calendar for the entire year. On a month-over-month basis, however, October GDP contracted by 0.3%, signaling some near-term softness as goods production and services output both declined.

Prime Minister Mark Carney is taking proactive measures to shield the economy from U.S. tariff risks, having secured an agreement with Alberta’s Premier Danielle Smith. The deal aims to boost energy sector investments by rolling back climate regulations and eliminating proposed emissions caps on oil and gas operations. Carney warned that existing U.S. tariffs could strip approximately $50 billion from Canada’s economy, underscoring the urgency of fiscal countermeasures.

Sector rotation was pronounced on Friday. Materials, Energy, and Financials led the gainers, with Aya Gold and Silver, Endeavor Silver, First Majestic Silver, and Vermilion Energy posting notable advances. By contrast, Healthcare and Consumer Discretionary lagged, with Aritzia, Gildan Activewear, Dollarama, and Sienna Senior Living among the underperformers.

In earnings news, Zoomd reported third-quarter net income of $3.8 million—a 20% year-over-year jump—bolstered by improved margins and disciplined cost management. The company generated $16.1 million in quarterly revenues while keeping operating expenses flat at $3.2 million, down 5% compared to the prior-year period. Adjusted EBITDA came in at $4 million, with earnings per share reaching C$0.06.