TSX Surges Amid Energy Rally as Traders Eye Jobs Reports and Currency Shifts

Canadian equity markets climbed on Thursday, with the benchmark S&P/TSX Composite Index finishing at 32,378.64, a gain of 243.15 points or 0.76%, as crude oil strength propelled the energy sector higher. Nine of eleven sectors advanced during the session, signaling broad-based investor optimism heading into the crucial employment releases scheduled for Friday from both Canada and the United States.

The rally came despite mixed signals from Canada’s trade landscape. Statistics Canada reported an unexpected C$583 million trade deficit for October 2025, a sharp reversal from September’s C$243 million surplus. Import growth accelerated to 3.4% while exports expanded more modestly at 2.1%. Most notably, the nation’s trade advantage with the United States compressed dramatically—Canada’s bilateral surplus shrunk from C$8.4 billion in September to just C$4.8 billion in October, reflecting softer outbound shipments and stronger inbound purchases. This narrowing margin has implications for Canadian dollar to US dollar exchange dynamics, particularly as currency markets digest the trade imbalance.

Energy stocks led the charge, gaining 1.89% as crude prices jumped. Individual movers included Baytex Energy Corp (up 6.98%), Vermillion Energy Inc (3.97%), and Cenovus Energy Inc (3.42%). The sector’s strength underscores investor appetite for commodity plays despite broader economic headwinds. Industrials (+1.34%), Real Estate (+0.99%), and Consumer Discretionary (+0.98%) also posted solid advances. Elsewhere, Cargojet Inc surged 7.49%, 5N Plus Inc jumped 7.14%, and Mda Ltd climbed 6.56%.

Weakness emerged in defensive sectors, with Financials declining 0.43% and Communication Services sliding 0.41%. DeFinity Financial Corporation fell 2.00%, while Dye & Durham Ltd tumbled 10.13%, marking the session’s largest loser. Power Corp of Canada dropped 1.92% and Quebecor Inc retreated 2.00%.

Market participants are closely monitoring Friday’s employment data releases from both countries, as these figures will be instrumental in shaping expectations around central bank monetary policy trajectories. Meanwhile, the Canadian government continues navigating trade pressures, including the 35% tariff threat and uncertainty surrounding the renewal of the Canada-United States-Mexico Agreement. Prime Minister Mark Carney has emphasized Canadian oil’s low-carbon advantage and competitive positioning. Against this backdrop, the compression in Canadian dollar to US dollar terms and the shift in trade balances reflect growing economic uncertainty, making employment data and policy clarity essential for near-term market direction.