Canadian Banks and Tech Giants Deliver Sharp Gains as TSX Hits Uncharted Territory

Canada’s stock market delivered a powerful rally Thursday, with the S&P/TSX Composite Index climbing to an unprecedented peak as investors rewarded strong corporate earnings and anticipated monetary easing from the Federal Reserve.

Financial Sector Leads the Charge

The banking sector emerged as the primary driver of the rally. Canadian Imperial Bank of Commerce surged 4% following robust quarterly results, posting net income of $2.18 billion for the quarter ended October 31, 2025—a 16% increase from $1.88 billion a year prior. The bank’s performance underscored the sector’s profitability momentum heading into year-end.

Toronto-Dominion Bank gained 1.5% after delivering strong fourth-quarter earnings, with adjusted net income reaching $3,905 million compared to $3,205 million in the prior year. Adjusted diluted earnings per share climbed to $2.18 from $1.72, reflecting improved operational efficiency.

Bank of Montreal reported even more dramatic earnings growth, with adjusted net income surging 63% to $2,514 million in the fourth quarter, though the stock dipped 1.4%. Royal Bank of Canada advanced 3%, while National Bank of Canada moved up 2.1%. Insurance and wealth management plays also participated in the rally, with Manulife Financial and Fairfax Financial Holdings gaining 1.2% and 1.1% respectively, while EQB Inc. soared more than 11%.

Technology and Energy Stocks Move Sharply Higher

The technology sector drove equally impressive gains. Descartes Systems Group zoomed 11.8% following an 11% revenue jump in the third quarter year-over-year. Other tech names including CGI Group, Dye & Durham, Celestica Inc. and Kinaxis climbed 2.3% to 3.2%, extending the sector’s leadership position.

Energy stocks also participated sharply in the upside, with PrairieSky Royalty, Headwater Exploration, Vermilion Energy, Canadian Natural Resources and Peyto Exploration and Development advancing 2.3% to 3.2%.

Broader Market Strength

Healthcare stocks displayed notable strength, with Curaleaf Holdings and Bausch Health Companies surging 6.5% and 5.3% respectively. Consumer discretionary standout BRP Inc. jumped 6.3% after third-quarter profits more than doubled to $76.5 million or $1.04 per diluted share, up from $30.6 million or $0.42 per share a year ago.

Staple consumer plays including Loblaw Co., Metro, Empire Company and Maple Leaf Foods climbed notably higher, while Pet Valu Holdings, Gildan Activewear, Aritzia and Dollarma each gained 1% to 2%.

Index Reaches Historic Milestone

The S&P/TSX Composite Index reached a new all-time high of 31,499.55 during Thursday’s session, ultimately closing up 315.29 points or 1.01% at 31,475.83 shortly past noon. The broad-based rally reflected optimism about anticipated Federal Reserve rate cuts next week, which fueled investor appetite for risk assets.

Economic Headwinds Signal Caution

Not all economic signals pointed skyward. Canada’s Ivey Purchasing Managers Index tumbled to 48.4 in November from 52.4 in October, significantly undershooting expectations of 53.6. The sharp decline in the business sentiment gauge suggests mounting pressures on Canadian manufacturing and economic activity, potentially validating the case for rate relief.

The market’s strength despite manufacturing headwinds underscores investors’ conviction that monetary stimulus will more than compensate for near-term economic softening, though the divergence between corporate earnings resilience and deteriorating business conditions warrants careful monitoring.