The TSX Composite closed at 36,228.74 Tuesday, up 219.34 points or 0.61 per cent, with technology and base metals names doing the work while energy stocks sat out the rally for a second straight week. The index is now 2.1 per cent above the one-month low of 35,491.30 it touched on September 16, the same day the Federal Reserve raised its policy rate for the first time in over three years.
Why Technology Carried the Index While Energy Did Not
The split is direct. Cenovus Energy fell 2.78 per cent to $44.35 on September 21 as WTI crude extended what is now a six-session losing streak, down from a September 15 peak of $105.83 to $90.56 Wednesday morning on hopes of US-Iran diplomacy easing the Strait of Hormuz risk premium that helped drive the September spike in the first place.
Technology and base metals stocks have moved the opposite way, tracking the same AI-linked momentum that has pushed the Nasdaq Composite to a record 27,232.71. For a TSX investor, that means the two forces lifting and dragging the index this month have almost nothing to do with each other: one is a currency and rate story tied to central bank divergence, the other is a Middle East diplomacy story working through the energy sector specifically.
The month-long swing from the September 16 low back to Tuesday close shows how quickly sentiment shifted once the rate decision was absorbed.
The TSX Composite touched a one-month low of 35,491.30 on September 16, the day the Federal Reserve raised its policy rate, before rebounding on technology and base metals strength into the September 22 close. Source: Yahoo Finance Canada.
The Currency Backdrop Working Against the Rally
The rebound is happening despite, not because of, the currency picture. The Canadian dollar closed at 71.08 cents US on September 22, down from 71.32 cents, as the widening gap between a Bank of Canada holding at 2.25 per cent and a Federal Reserve that just raised to 3.75 to 4 per cent continues to weigh on the loonie.
US markets gave a mixed signal Tuesday that TSX investors should not read as a single message. The Dow fell 248.22 points to 51,800.61 while the Nasdaq climbed 110.62 points to a record 27,232.71 and the S&P 500 edged up 0.56 points. The divergence is sector-specific, technology strength against broader softness, the same pattern showing up on the TSX between base metals and technology on one side and energy on the other.
December gold slipped $8.30 to US$4,375.60 an ounce, a modest move that suggests safe-haven demand is easing in step with the broader de-escalation in oil, rather than signalling any renewed flight to safety.