Record highs are one thing, 30,000 is another.
The S&P/TSX Composite Index passed this threshold on Tuesday, underscoring a near non-stop rally since April as everything from banks and tech firms to gold producers and retailers sailed through lingering economic concerns.
The Canadian benchmark has gained 35 per cent from its recent intraday low on April 7 – when stocks worldwide were tumbling over the introduction of steep U.S. tariffs that made little distinction between friend and foe and threatened to drag down the global economy.
It has outperformed the S&P 500, the U.S. benchmark, by eight percentage points this year.
“Headlines and rhetoric just scared everybody, and they forgot how resilient Canadian companies are,” Brian Belski, chief investment strategist at BMO Capital Markets, said in an interview.
Canada had a couple of advantages as this resilience began to emerge earlier this year.
First, Canadian stocks were cheaper than U.S. stocks – and even many global stocks – based on profits. That made them particularly attractive when some of the worst economic fears subsided.
Another big advantage: The Canadian benchmark has a heavy weighting in gold, a hot commodity this year because it offset concerns about inflation, geopolitical risk, U.S. central bank independence and the value of the U.S. dollar.
Some of the world’s biggest gold producers are listed in Canada, and their gains have helped drive the composite index higher.
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The diversified materials sector, which includes other mining companies apart from gold producers, has soared more than 70 per cent this year.
But it is becoming increasingly clear that the rally has gone well beyond sparkling things, which leads to a third advantage: The S&P/TSX Composite Index is loaded with companies that are navigating the year’s twists and turns with apparent ease.
Among retailers, Dollarama Inc. DOL-T, the dollar-store giant, has risen 33 per cent in 2025. And Aritzia Inc. ATZ-T, which sells high-end women’s clothing and reported revenue growth of 33 per cent in its most recent quarter, has gained 67 per cent.
Celestica Inc. CLS-N has surged 165 per cent, as investors discover that the company is key to the rollout of infrastructure tied to artificial intelligence.
Shopify Inc. SHOP-T has risen 42 per cent, and flirted with overtaking Royal Bank of Canada RY-T as the country’s most valuable publicly traded company, based on the value of its outstanding shares.
The e-commerce company’s market capitalization is now $275-billion, or less than $12-billion shy of RBC.
But the banks, which essentially reflect the health of the economy, are no slouches either.
The S&P/TSX Composite Index hit a new milestone on Tuesday after a long rally.Paige Taylor White/The Canadian Press
Canada’s biggest lenders have gained 24 per cent this year, on average, even as they set aside more money to cover bad loans and executives continue to address the uncertain economic climate in earnings calls.
Toronto-Dominion Bank TD-T, last year’s laggard when it faced an enormous U.S. regulatory fine over its flawed anti-money laundering program, has been a standout in the sector, gaining nearly 43 per cent.
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What had been a relatively cheap sector, based on profits, is now at the high end of its historic range – which suggests that investors are shifting their focus toward a stronger economy and subsiding loan losses in the years ahead.
“A common refrain we hear to justify sector valuations is that the market is ‘looking ahead’ to 2027, timing that may coincide with an economic recovery and a positive shift in the credit cycle,” Gabriel Dechaine, an analyst at National Bank of Canada, said in a note this week.
To be sure, the 30,000 threshold for the S&P/TSX Composite Index is a big, round number that should have no bearing on what comes next for this year’s standout rally.
But it says a lot about the stunning turnaround in investor sentiment that could have further to go.
“If the stock market has done this well with the economy supposedly doing terribly, what’s going to happen when the economy turns?” Mr. Belski said.