Canadian Equities Hit Fresh Peak on Robust GDP Rebound and Rate Cut Optimism

Canada’s stock market surged to an unprecedented level Friday as investors digested stronger-than-anticipated economic expansion alongside growing expectations for interest rate relief. The S&P/TSX Composite Index advanced 155.13 points, or 0.5%, to settle at 31,351.84 during mid-morning trading, with intraday peaks reaching 31,359.47.

Economic Data Fuels Market Rally

The turning point came from Statistics Canada’s GDP figures, revealing a significant turnaround in economic momentum. Third-quarter GDP expanded 0.6% sequentially, reversing the prior quarter’s revised 0.5% contraction. On an annualized basis, growth accelerated to 2.6%, a sharp rebound from Q2’s revised 1.8% decline and substantially exceeding the 0.5% forecast. However, October’s flash estimate showed a 0.3% monthly contraction, signaling recent economic softness.

Fiscal developments painted a mixed picture, with Canada’s government budget deficit widening to CAD 5.0 billion in September 2025 versus CAD 3.2 billion year-over-year, according to Department of Finance data.

Sector Rotation Reflects Commodity Strength

Materials emerged as the session’s strongest performer, with the Materials Capped Index climbing 2%. Silver-focused companies led gains, as Endeavour Silver, Discovery Silver, First Majestic Silver, and Aya Gold & Silver each surged 12-14%. Supporting cast included Pan American Silver, New Gold, Ero Copper, Skeena Resources, Novagold, G Mining Ventures, Seabridge Gold, First Quantum Minerals, and Kinross Gold.

Energy stocks registered the second-largest advance, with the Energy Capped Index up 1.1%. Vermilion Energy skyrocketed 6%, while Kelt Exploration, Birchcliff Energy, Ces Energy Solutions, Tourmaline Oil, and Athabasca Oil each gained between 2.5% and 4%. Industrials also participated, with Canadian National Railway, Enerflex, Premium Brands, Celestica, Spin Master, and Cogeco Cable posting notable increases.

Headwinds in Select Segments

Weakness appeared selective, with Extendicare, Computer Modelling, Gildan Activewear, Mattr Corp., Bombardier, and Power of Canada showing declines. The broader market undertone remained constructive, supported by anticipation of a Federal Reserve rate cut slated for December, which continues to buoy risk appetite across North American markets.