Market Whipsaw: Canadian Stock Rally Fizzles as Materials Lose Ground

What a rollercoaster for Toronto markets. The TSX Composite Index kicked off Thursday on fire, soaring past 30,600 and up over 350 points, riding optimism around Nvidia’s blockbuster earnings that eased AI bubble concerns. But the rally proved short-lived. By midday, the benchmark had completely reversed, dropping 308.95 points to 29,969.46—a 1.02% slide into negative territory.

Nvidia’s Earnings Spark Initial Optimism, Then Reality Sets In

The early bullish mood made sense. Nvidia delivered a knockout punch with third-quarter revenue jumping 62% to $57 billion, smashing expectations. The real star? AI data-centre chips, which posted a staggering 66% surge in sales, reaching over $51 billion and cementing the chipmaker’s role as the cornerstone of global AI infrastructure. Management’s guidance for Q4 sales around $65 billion—well ahead of Street estimates—initially fueled the risk-on sentiment that pushed the TSX higher.

Yet enthusiasm couldn’t survive what came next: a brutal selloff in the materials sector.

Materials Sector Gets Hammered

The real pain hit commodities. The Materials Capped Index cratered, losing as much as 3.3%, dragging the broader market down with it. Silver miners took the biggest hits, with Discovery Silver Corp, First Majestic Silver Corp, and Endeavour Silver Corp all shedding 5 to 6.5%. Aya Gold & Silver and Pan American Silver Corp joined the bloodbath, while SSR Mining, Iamgold Corp., Equinox Gold, Eldorado Gold, B2Gold Corp and Kinross Gold Corp represented further carnage in the precious metals complex.

Tech wasn’t immune either. Celestica dropped 5.1%, while Firan Technology Group fell 2.7%. Software plays like Lightspeed Commerce, Coveo Solutions, and BlackBerry slipped lower by 1 to 1.7%.

A Few Bright Spots

Not everything tanked. Altus, Gran Tierra Energy, Brookfield Business Partners, Air Canada, Bombardier, Enerflex and Stella-Jones managed gains of 2 to 6%, providing some lifeline for portfolio managers.

Economic Data Paints a Mixed Picture

Behind the scenes, Canada’s economic momentum showed signs of stalling. Industrial producer prices rose 1.5% month-over-month in October—the fifth consecutive monthly climb—with annual increases hitting 6.0%. The country’s Raw Materials Price Index climbed 1.6% month-over-month and 5.8% year-over-year, though the pace of gains is moderating.

One bright spot: the Canadian Federation of Independent Business’s CFIB Business Barometer surged to 55.5 in November from 46.7 in October, suggesting business owners are feeling more upbeat about 12-month forward prospects. Whether that optimism can translate into sustained market strength remains to be seen.