The Canadian stock market, for the large part, has been quite impressive this year. The Canadian benchmark index, the S&P/TSX Composite Index, hit new all-time highs several times in 2025. As of this writing, the index has pulled back slightly, but even now, it is up by almost 20% year-to-date.
The recent downturn can be attributed to the pressures of trade tensions, geopolitical factors, and inflation finally catching up to the economy. However, not all TSX stocks are entirely vulnerable to market volatility and economic cycles. Even during market downturns, you can find TSX stocks that can strengthen your portfolio.
While these stocks might not be immune to the effects of broader market movements, the underlying businesses have the kind of resilience to weather the storm. Investing in such assets can protect your investment capital.
If you are also worried about the market uncertainty, here are two TSX stocks that can inject some stability to your portfolio for the long run.
Hydro One
Hydro One Ltd. (TSX:H) is a $31.3 billion market-cap company that provides electricity transmission and distribution services across Ontario. Almost its entire portfolio of assets operates in a rate-regulated market, effectively shielding the company’s cash flows from market fluctuations.
Electricity is an essential utility that people need, regardless of the economic cycle. This means that Hydro One can continue generating revenue, even when consumers are cutting costs. Electricity demand has been increasing over the years, especially with increased Artificial Intelligence (AI) adoption. Businesses like Hydro One will only become more important in the coming years.
As of this writing, Hydro One stock trades for $52.11 per share. At this price, H stock might be an excellent pick to consider for your portfolio.
Waste Connections
Waste Connections Inc. (TSX:WCN) might seem like an unusual name to discuss, but the $60.1 billion market-cap stock cannot be ignored. WCN is an integrated provider of traditional solid waste and recycling services across North America. The company handles collecting, transferring, and disposing of nonhazardous solid waste. It also engages in resource recovery through its generation of renewable fuels and recycling operations.
The waste management industry is booming, and WCN has done well over the years. In the last five years, it has acquired over 100 more assets that contribute over $2.2 billion in annual revenue for the company. The essential nature of its business and continuous acquisitions also position it well for substantial long-term growth.
As of this writing, Waste Connections stock trades for $233.41 per share, and it might be a bargain at current levels.
Foolish takeaway
When investing in the stock market, it’s important to remember that no investment is entirely risk-free. Stock market investing is inherently risky, but that is also why it can deliver better returns on your investment than wth fixed-income assets like Guaranteed Income Certificates (GICs).
A strong portfolio can be diversified across several asset classes to offset potential losses. Creating a well-balanced portfolio can offer solid long-term growth with a mix of risk mitigation. To this end, high-quality and resilient TSX stocks can be essential to your self-directed investment portfolio. Waste Connections stock and Hydro One stock can be astute holdings to consider for this purpose.
