| Index | Close | Week | Year to date |
|---|---|---|---|
| S&P/TSX Composite | 36,620.23 | -0.30% | 15.48% |
| Dow Jones Industrial Average | 53,277.01 | -0.85% | 10.85% |
| S&P 500 Index | 7,674.37 | -1.43% | 12.11% |
| Nasdaq Composite | 26,180.45 | -2.05% | 12.64% |
| 10-year Canadian Bond Yield | 3.76% | 0.08% | 0.34% |
| 10-year U.S. Treasury Yield | 4.74% | 0.06% | 0.56% |
| Canadian Dollar | US$0.7267 | 0.83% | -0.40% |
Prime Rate 4.45% |
|||
Weekly performance ended August 21, 2026.
Sources: Morningstar Direct, Bank of Canada and U.S. Department of the Treasury
Stock markets pulled back
Canada’s TSX started the week cautiously on Monday as investors assessed Statistics Canada’s latest inflation report and monitored ongoing trade negotiations between Canada and the U.S. The Canadian benchmark slipped 0.2% with losses in technology, consumer staples and financial shares outweighing gains in energy and materials stocks. On Wall Street, rising oil prices and uncertainty surrounding U.S.-Iran negotiations weighed on investor confidence. The Dow and the S&P 500 fell 0.5%, while Nasdaq declined 0.3%.
Selling pressure intensified on Tuesday as government bond yields climbed to multi-year highs across several major economies, raising concerns about borrowing costs and inflation. The TSX fell 0.8%, extending its losing streak to three sessions and marking its lowest close in nearly two weeks. Technology, financial and materials shares drove the decline. U.S. markets also moved lower. The Dow dipped 0.2%, the S&P 500 lost 0.7% and the Nasdaq dropped 1.3%. Technology stocks were among the largest drags on performance.
Markets stabilized on Wednesday after bond yields retreated and investors welcomed signs of progress in Canada-U.S. trade negotiations. The TSX edged 0.1% higher, ending a three-day losing streak. Materials shares led the advance as gold prices climbed sharply. In the U.S., the major indexes also posted modest gains, with the Dow and the S&P 500 rising 0.2%, while the Nasdaq added 0.1%. Investor sentiment improved after U.S. Treasury officials announced additional liquidity support measures to ease pressure in the bond market.
On Thursday, rising bond yields and higher oil prices renewed concerns about inflation and borrowing costs. The TSX slipped 0.1%, weighed down by losses in financial, consumer staples and consumer discretionary shares. On Wall Street, the Dow fell 1.3%, while the S&P 500 and Nasdaq dropped 0.9% and 1.0%, respectively. Disappointing results from major retailer Walmart raised fresh questions about consumer spending. Treasury yields also resumed their upward climb despite additional reassurances from U.S. officials aimed at supporting bond-market liquidity.
A late-week rebound helped the major North American stock markets recover some of their earlier losses, but they still closed lower on a weekly basis. The TSX rose 0.7% on Friday, led by gains in materials shares as gold prices climbed sharply. U.S. markets also advanced, with the Dow adding 1.0% and the S&P 500 and Nasdaq each gaining 0.4%.
Canadian inflation accelerated in July
Canada’s inflation rate moved higher in July, reflecting the continued impact of energy-related costs on the economy. Statistics Canada reported on Monday that the Consumer Price Index (CPI) rose 3.0% year-over-year, up from 2.8% in June and slightly above economists’ expectations. Higher gasoline prices were a major contributor to the increase, reflecting renewed volatility in global energy markets as hopes for a lasting U.S.-Iran ceasefire faded. Excluding gasoline, the CPI rose 2.2% year-over-year for a third consecutive month.
Travel-related costs also contributed to the increase. Airfares rose 12% from a year earlier, while travel-tour prices increased amid stronger demand for travel to U.S. destinations hosting FIFA World Cup events. Meanwhile, inflation for food purchased from stores slowed to 3.1%, down from 3.9% in June, helping offset some of the upward pressure from energy and travel costs.
The latest inflation report represents one of the final major economic releases before the Bank of Canada’s September 2 interest-rate announcement. It’s expected to reinforce the view that policy-makers will remain cautious as they assess the outlook for inflation and economic growth.
Canada-U.S. trade negotiations remained a key focus
Trade discussions between Canada and the United States remained under close watch throughout the week with negotiators working to avoid proposed new U.S. tariffs on a broad range of Canadian goods. Following several weeks of talks, U.S. President Donald Trump announced Tuesday that the two countries had reached a tentative agreement. As a result, he delayed the introduction of additional tariffs that had been scheduled to take effect the same day.
The announcement provided temporary relief for businesses and investors concerned about the potential impact of higher trade barriers on economic growth and corporate profitability. However, details remained limited, and negotiations continued through the week as both sides worked through unresolved issues. Reports suggested discussions remained focused on obtaining relief from existing U.S. tariffs on products such as steel, aluminum, automobiles and forest products.
Despite signs of progress earlier in the week, negotiations broke down late Friday and no agreement was reached before the latest tariff deadline. Canada subsequently suspended trade talks and announced plans for reciprocal measures in response to new U.S. tariffs on certain Canadian goods.
When investing, it’s always a good idea to focus on the long-term, especially during times of uncertainty. If your investment goals, risk tolerance and time horizon haven’t changed, you’re likely on the right track. If you decide it’s time to review your plan, our financial representatives are here to help.
Jackson Hole Economic Policy Symposium (August 27 to 29)
The Jackson Hole Economic Policy Symposium brings together central bankers, economists and financial market participants from around the world to discuss key economic and policy issues. This year’s theme is Financial Innovation: Implications for Payments and Policy. Investors will watch for comments that could provide insight on the outlook for interest rates and economic growth.
More important dates
- September 2: Bank of Canada interest rate announcement
- September 7: North American markets closed for Labour Day
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