Market recap: Week ended August 7, 2026

Stocks climbed to record highs on earnings optimism

Canadian markets were closed on Monday for the Civic Holiday. In the U.S., the major stock markets opened the week with substantial gains after declining oil prices helped ease inflation concerns and boost investor sentiment. The Dow rose 1.3%, while the S&P 500 and Nasdaq gained 1.5% and 2.1%, respectively. Technology stocks led the advance as investors looked ahead to another busy week of corporate earnings.

Momentum accelerated on Tuesday. The TSX climbed 1.6% to a record close, powered by gains in technology, materials and industrial stocks. On Wall Street, the Dow advanced 1.7% and the S&P 500 gained 1.8%, with both indexes finishing at record highs. The tech-heavy Nasdaq surged another 2.6%, boosted by stronger-than-expected earnings from companies connected to the ongoing AI infrastructure expansion.

Canada's TSX extended its rally on Wednesday, adding 1.0% to reach another record closing high. Gains were led by technology and materials shares, as Shopify surged following robust quarterly results and gold prices moved higher. U.S. markets were mixed. The Dow rose 0.5% to another record close, while the S&P 500 slipped 0.2% and the Nasdaq declined 0.8%, as investors digested ongoing developments in the Middle East.

The TSX slipped 0.03% on Thursday, as losses in technology, consumer discretionary and industrials shares offset gains elsewhere. Toronto-based Celestica fell nearly 13% after the data-centre infrastructure company announced the pricing of an equity offering. Cambridge, Ontario’s ATS Corporation tumbled nearly 27% after quarterly results missed analyst expectations. In the U.S., stocks also moved lower as investors digested another round of corporate earnings and monitored developments in the Middle East. The Dow fell 0.85%, while the S&P 500 and Nasdaq dipped 0.18% and 0.06%, respectively.

On Friday, the TSX rose 0.7% to another record closing high, led by gains in mining and real estate shares. The advance came after weaker-than-expected U.S. employment data reduced expectations for a September interest-rate increase. On Wall Street, the S&P 500 gained 0.6% to secure its second record close of the week, while the tech-heavy Nasdaq surged 1.3% and the Dow added 0.3%. For the week, the TSX advanced 3.3%, its strongest weekly gain in four months, while the major U.S. indexes posted their biggest weekly advances since April.

Corporate earnings reinforced confidence in AI-related spending

Strong quarterly results from technology companies on both sides of the border suggested businesses continue to invest heavily in AI-related tools and services, despite ongoing concerns about valuations and the broader economic outlook.

Palantir Technologies was among the week's standout performers, with shares surging nearly 30% on Tuesday after the Miami-based software company raised its annual revenue forecast. The firm's results were viewed as another sign that demand for AI-powered data analytics remains strong among corporate and government customers. Investors also responded positively to earnings from Caterpillar, which highlighted growing demand for equipment used in data-centre construction and power generation projects tied to the rapid expansion of AI infrastructure.

Semiconductor maker AMD reported a 50% increase in quarterly revenue and issued a stronger-than-expected outlook. The company pointed to continued growth in its data-centre business as technology companies expand computing capacity to support AI applications.

In Canada, Shopify shares jumped 16.5% on Wednesday after the company reported quarterly revenue growth of nearly 34% and issued an upbeat forecast. Management cited growing adoption of AI-powered tools designed to help merchants build and manage online stores. The results helped lift the broader TSX technology sector and provided another example of how AI-related investment continues to influence business strategies across industries.

Canadian and U.S. employment data painted contrasting pictures

The Canadian economy added 75,100 jobs according to Statistics Canada’s labour market data released on Friday. The gains far exceeded the 16,500 new jobs analysts were expecting and marked another sign of resilience despite ongoing trade uncertainty and global economic tensions. The unemployment rate declined to 6.4%, its lowest level in two years. Strength was concentrated in private-sector industries, including wholesale and retail trade, finance and insurance, and professional, scientific and technical services. Gains were also broadly seen across both full-time and part-time positions.

The picture was markedly different in the U.S., where employers unexpectedly cut 23,000 jobs in July. The report also included sizeable downward revisions to payroll figures for May and June, pointing to weaker hiring momentum than previously reported. Economists had broadly expected employment growth to continue during the month.

Despite the decline in employment, the U.S. unemployment rate edged down to 4.1%. The decrease was largely attributed to workers leaving the labour force rather than stronger hiring activity. Employment losses were concentrated in leisure and hospitality, local government and retail trade.