The S&P/TSX Composite Index finished sharply higher on Tuesday at a record close, led by steep gains in base metals and technology stocks, as investors weighed stronger-than-expected domestic economic data against a sharp decline in oil prices.
The index closed up 575.45 points, or 1.6%, at 35,801.59, with mixed sectors. Base Metals led gainers, up 7.3%, while Information Technology was up 7.1%. Energy led decliners, down 2.9%.
In commodities, West Texas Intermediate (WTI) crude oil fell sharply on Tuesday after signs of progress in US-Iran talks raised hopes that the Strait of Hormuz could reopen to normal commercial shipping.
September WTI crude oil contract closed down $4.57, or 5.7%, and settled at $75.77 per barrel, while October Brent oil was last seen down $4.46, or 5.3%, at $79.32 per barrel.
Meanwhile, gold edged higher as weakened oil prices lowered inflation fears. Spot gold was last seen up 0.6%, or $25.12, to $4,079.45 per ounce, while Comex gold futures for December delivery rose 1.1%, or $44.50, to $4,135.00 per ounce.
Separately, Canadian Pacific Kansas City (CP.TO) on Tuesday said it moved 30.66 million metric tonnes of Canadian grain and grain products during the 2025-2026 crop year, breaking its 2020-2021 crop year record by nearly 72,500 metric tonnes.
On the economic front, Canada's trade balance remained in surplus for a fourth straight month in June, beating market expectations, Statistics Canada data showed Tuesday.
Merchandise trade surplus edged up to C$3.9 billion in June from C$3.7 billion in May, as monthly exports rose 0.4% and imports increased 0.2%, according to the country's statistical agency on Tuesday. June's surplus topped a C$3 billion estimate provided by Bloomberg.
Total exports hit a record C$77.5 billion in June, marking a fifth consecutive monthly increase, wrote Statistics Canada in a statement.
Another economic report pointed to improving business conditions in Canada's manufacturing sector.
Canada's manufacturing sector saw its greatest improvement in over four years in July thanks to output and orders, according to S&P Global on Tuesday. The seasonally adjusted Canada Manufacturing PMI rose to 53.5 in July from 53.0 in June, reaching its highest level since June 2022 and signaling a fourth consecutive month of expansion, wrote S&P Global in a note.
In corporate news, Telesat (TSAT.TO) subsidiary Telesat LEO ULC signed a C$2.3 billion contract with Canada's Defence Investment Agency to deliver secure Arctic military satellite connectivity to the Canadian Armed Forces. This marks as the largest contract in Telesat's history, the company said Tuesday.
Looking ahead, investors will turn their attention to Canada's July employment report due later this week.
RBC Economics forecasts employment to increase by 5,000 in July, with the jobless rate unchanged at 6.5%. StatsCan Canada will publish the July Labour Force Survey on Friday at 8:30 a.m. ET.