TSX Today: Why Canadian Stocks Could Fall on Tuesday, September 5

Intraday weakness in commodity prices could drive the main TSX index lower at the open today.

Jitendra Parashar

Author Bio Jitendra Parashar is a financial journalist who has been writing for The Motley Fool Canada since June 2020. With more than 13 years of experience in financial journalism, equity research, and market analysis, he helps investors understand market developments and identify long-term investment opportunities. Before joining The Motley Fool Canada, Jitendra spent several years at Market Realist covering U.S. equities, major economic developments, and developments in the automotive and technology industries. He also worked in commodity and currency research at brokerage firms, gaining insight into how economic trends, central bank decisions, and geopolitical events influence financial markets. Jitendra writes for beginner investors, dividend seekers, and Canadians looking to build wealth over the long term. He also contributes to the daily TSX Today series, explaining key Canadian market developments and highlighting news investors should watch. Based in India, Jitendra follows Canadian and U.S. markets closely. Outside of work, he enjoys travelling in the Himalayas, street and nature photography, and exploring programming and artificial intelligence. Education MBA in Finance and International Business Bachelor's degree in Journalism Areas of Expertise Canadian and U.S. financial markets, long-term equity investing, dividend investing, macroeconomic and geopolitical trends, automotive stocks, emerging technologies, and artificial intelligence. Social Media Profiles LinkedIn Muck Rack Favorite Investment Quote “Simplicity is the master key to financial success.” — John C. Bogle

Published September 5, 2023 8:21 am EDT

Surging oil and base metals prices helped the Canadian stock market start September on a strong note after ending August on a negative note. The S&P/TSX Composite Index rallied by 253 points, or 1.2%, on Friday to settle at 20,545, its highest closing level in a month.

While all key TSX sectors ended the session in green, the market rally was primarily led by energy, healthcare, and industrial stocks. Notably, West Texas Intermediate crude oil futures prices have jumped roughly 9% in the last seven sessions, leading to a solid recovery in the shares of oil and gas companies.

Top TSX Composite movers and active stocks

Canadian Western Bank (TSX: CWB) popped 11.4% in the last session to $29.30 per share after the release of its better-than-expected quarterly financial results. In the third quarter of its fiscal year 2023 (ended in July), the Edmonton-based bank’s revenue rose 4.3% year over year to $283.5 million with the help of improved interest income.

Although Canadian Western Bank’s adjusted earnings fell 2.2% from a year ago to $0.88 per share last quarter due mainly to higher provision for credit losses, its earnings figure was still stronger than analysts’ expectations. After this rally, CWB stock now trades with about 22% year-to-date gains, outperforming all its home market peers.

MEG Energy, Tamarack Valley Energy, Whitecap Resources, and Filo were also among the top gainers on the Toronto Stock Exchange on September 1, as they inched up by at least 4.5% each.

On the flip side, Sleep Country Canada and Alamos Gold dived by more than 3% each, making them the worst-performing TSX stocks for the day.

Based on their daily trade volume, Suncor Energy, Canadian Natural Resources, Manulife Financial, and TC Energy were the most active stocks on the exchange.

TSX today

Prices of energy products were turned bearish early Tuesday morning after rallying for several days while precious metals prices continued to plunge. Given these negative signals, I expect the commodity-heavy main TSX index to remain under pressure at the open today, with expected heavy losses in energy and mining stocks.

While no major economic releases are due today, TSX investors may want to remain cautious ahead of the Bank of Canada’s interest rate decision scheduled for tomorrow.