Investment update
Weekly insight into the marketplace.
September 15 to 19, 2025
Markets continued to trend upward
The trading week started with record closing highs on Monday for Canada’s TSX, the S&P 500 and the Nasdaq. Investors were looking ahead optimistically to Wednesday’s interest-rate decisions from the Bank of Canada and the U.S. Federal Reserve. Big tech also helped drive Monday’s gains with shares of Tesla jumping 3.6% and Alphabet surpassing US$3 trillion in market capitalization. Trading was choppy on Tuesday and all four of the North American benchmarks lost ground. The TSX lost 0.4%, the Dow fell 0.3%, the S&P 500 lost 0.1% and the Nasdaq declined 0.07%. Markets were mixed on Wednesday after the Bank of Canada and the Fed moved in lockstep, announcing quarter-point rate cuts for the first time in several months. The TSX and the Dow both closed higher, up 0.2% and 0.6% respectively. The S&P 500 slipped 0.1% and the Nasdaq ended 0.3% lower. On Thursday, tech stocks, led by Nvidia after the chip maker announced a US$5 billion investment in Intel, helped push TSX and Wall Street benchmarks to fresh record highs. The record runs continued Friday. The TSX climbed 1.1% supported by higher prices for base metals. The Wall Street benchmarks all rose on reports of progress in U.S.-China trade talks.
Canadian inflation increased in August
Statistics Canada reported on Tuesday that the Consumer Price Index (CPI) rose 1.9% on a year-over-year basis in August. It was slightly below the 2% that economists were expecting, but up from 1.7% in July. Despite falling 12.7%, gasoline prices were a main driver of the uptick, with prices declining less than in July. Food purchased in stores was also up 3.4%, with meat prices in particular climbing 7.2%. Housing costs were another factor, with the price of rent climbing 4.5% from the same time last year. Core inflation, which strips out the more volatile food and energy categories, increased by 0.1% for the second straight month, in August. Looking at prices month by month, CPI increased 0.1% from July to August. The milder-than-expected inflation reading likely helped the Bank of Canada firm up its decision to cut the key interest rate on Wednesday.
The Bank of Canada and the Fed cut rates
On Wednesday the Bank of Canada and the Fed followed through on - what’s expected to be - the first of two interest-rate cuts by each central bank before the end of 2025. Each lowered their key rates by 25 basis points, leaving the Bank of Canada’s rate at 2.5% and the Fed’s target range at 4% to 4.25%. This was the first rate cut for the Bank of Canada dating back to March 12. In his opening statement, Bank of Canada Governor Tiff Macklem outlined three developments that informed the decision: A softening Canadian labour market, diminishing upward pressure on inflation and Canada’s removal of most retaliatory tariffs on the U.S. Speaking to reporters, Macklem said: “Considerable uncertainty remains. But with a weaker economy and less upside risk to inflation, governing council judged that a reduction in the policy rate was appropriate to better balance the risks going forward.” For the Fed, Wednesday’s decision was the first rate reduction since December 18, 2024. Explaining the Fed’s rationale, Chair Jerome Powell said: “This was a risk-management cut. The labour market is softening, and we want to ensure we don’t fall behind the curve.”
The stock and bond market*
| Index | Close | Week | YTD |
|---|---|---|---|
| S&P/TSX Composite | 29,768.36 | 1.65% | 20.38% |
| Dow Jones Industrial Avg. | 46,315.27 | 1.05% | 8.86% |
| S&P 500 Index | 6,664.36 | 1.22% | 13.31% |
| Nasdaq Composite | 22,631.48 | 2.21% | 17.20% |
| 10-yr Canadian Bond Yield | 3.20% | 0.02% | -0.03% |
| 10-yr U.S. Treasury Yield | 4.14% | 0.08% | -0.44% |
| WTI Crude Oil (US$/barrel) | 62.68 | -0.02% | -12.61% |
| Canadian Dollar | US$0.73 | 0.44% | 4.33% |
Prime Rate 4.70 % |
|||
*Weekly performance ending September 19, 2025. Sources: Morningstar Direct, Bank of Canada, U.S. Department of the Treasury and CME Group
Never try to time the market.No one can predict when the markets will rise or fall, or by how much. This makes timing the market a risky approach. Your investment strategy, from the outset, should be based on your goals, your risk tolerance and your time horizon – not the market’s. If you have questions, a Co-operators financial representative is always ready to help.
U.S. Personal Consumption Expenditures price index (September 26): The Fed’s preferred gauge of inflation will be closely watched with investors turning their attention to a second possible rate cut before year’s end.
Circle these dates
October 13: Canadian markets closed for Thanksgiving Day
October 28 to 29: U.S. Federal Reserve interest-rate decision
October 29: Bank of Canada interest-rate decision
The commentary in this report is based on current market conditions and market media sources available to the public and may change without prior warning at any time. The forecasts provided herein are not guarantees of future performance and include risks, uncertainty and assumptions. While Co-operators Life Insurance Company (“Co-operators”) believes these assumptions are reasonable, there is no guarantee they will be confirmed. This report is not a guarantee of future investment performance, nor should undue reliance be placed on this report. This report is provided as a general source of information for a specific point in time and should not be considered solicitation to buy or sell any investment. Nothing contained in this report constitutes investment, legal, tax or other advice. The content in this report should not be relied upon in making an investment or other decision, and individuals should obtain relevant and specific professional advice and read the terms and conditions contained in the relevant offering documents carefully before any investment decision is made. Co-operators is not responsible for any loss or damage as a result of reliance on the information contained in this report. Co-operators makes no representations or warranties as to the information contained herein and does not guarantee its accuracy, timeliness, completeness or usefulness. Co-operators is committed to protecting the privacy, confidentiality, accuracy and security of the personal information it collects, uses, retains and discloses in the course of conducting business. Please visit cooperators.ca/privacy for more information. Co-operators® is a registered trademark of Co-operators Group Limited and is used with permission. Investing in your future. Together.TM is a trademark of Co-operators Group Limited. If you are a client who has received this, and you have questions or want to discuss your investments, please contact your Financial Advisor.
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