| Index | Close | Week | Year to date |
|---|---|---|---|
| S&P/TSX Composite | 31,527.39 | 0.69% | 27.50% |
| Dow Jones Industrial Average | 48,458.05 | 1.05% | 13.90% |
| S&P 500 Index | 6,827.41 | -0.63% | 16.08% |
| Nasdaq Composite | 23,195.17 | -1.62% | 20.12% |
| 10-year Canadian Bond Yield | 3.44% | 0.02% | 0.21% |
| 10-year U.S. Treasury Yield | 4.19% | 0.05% | -0.39% |
| WTI Crude Oil (U.S.$ per barrel) | 57.44 | -4.39% | -19.91% |
| Canadian Dollar | US$0.73 | 0.67% | 4.51% |
Prime Rate 4.45 % |
|||
Weekly performance ending December 12, 2025.
Sources: Morningstar Direct, Bank of Canada, U.S. Department of the Treasury and CME Group
2025 in review
Markets withstood trade and tariff-related volatility and ended the year with substantial gains. The turbulence was offset by interest-rate cuts, soaring tech stocks and robust corporate earnings.
Q1: Volatility dragged equity markets
For Canadian investors, the first quarter had a dramatic start when Justin Trudeau announced his plan to step down as Prime Minister on January 6. In the immediate aftermath, oil and gas stocks surged and the loonie gained strength. Widespread uncertainty caused by U.S. trade policies followed. But despite being one of the main countries targeted by U.S. President Donald Trump’s tariffs, Canada’s benchmark stock index, the TSX, outperformed its U.S. counterparts, ending Q1 with a 0.77% gain. Gold was a key driver as investors flocked to safe-haven assets amid the global turmoil.
In the U.S., the S&P 500 and the Nasdaq had their worst quarterly performance since 2022, falling 4.59% and 10.42%, respectively. Optimism was initially high for the Trump administration and its pro-business approach, but the fear of an economic slowdown after Trump announced his tariff plans hit equity markets hard, especially in the tech sector. Six of the Magnificent Seven group of stocks underperformed through the quarter, with shares of Nvidia and Tesla posting the largest declines, down 20% and 35%, respectively.
Q2: Stock indexes rallied
After suffering heavy losses in April, the S&P 500 and the Nasdaq shot back to record-high closing levels by the final two trading days of Q2. The Dow remained slightly below its last record close, but the blue-chip index turned positive on a year-to-date (YTD) basis in the final week of the quarter. The Dow gained 4.98% for the three months ending June 30, the S&P 500 added 10.57% and the Nasdaq jumped 17.75%. The TSX cooled slightly in late June, but closed the quarter with a 7.78% gain, and remained ahead of Wall Street YTD, up 8.61% at mid-year. All told, it was a remarkable rebound.
On April 2, President Trump signed an executive order imposing tariffs on more than 180 countries. The market responded with its worst two-day drop since March 2020. The TSX, the Dow and the S&P 500 all declined more than 10% to enter a correction, while the Nasdaq fell into bear-market territory (down 20% from its recent peak). U.S. stocks lost a combined US$6.4 trillion in market value. On April 9, President Trump announced a 90-day tariff pause, which allowed stock markets to begin recouping losses. Stronger-than-expected corporate earnings reports and resilient economic data (with inflation remaining a key concern for investors), also helped offset losses in Q2.
Q3: Markets hit record levels
Investors brushed off tariff-related inflation risks in the third quarter and bet that central banks would resume cutting interest rates to support economic activity. On Wall Street, the Dow increased 5.22%, the S&P 500 gained 7.79% and the tech-heavy Nasdaq jumped another 11.24%. Canada’s benchmark TSX, which continued to outpace its U.S. counterparts, rose 21.41% YTD – an all-time high to end the quarter.
On September 17, the Bank of Canada and the U.S. Federal Reserve (the Fed) lowered their key rates by 25 basis points, leaving the Bank of Canada’s rate at 2.70% and the Fed’s target range at 4% to 4.25%. It was the first rate cut for the Bank of Canada since March 12.
Q4: The year closed with strong gains
The TSX opened Q4 above the 30,000-point level for the first time. The commodity-heavy index benefited from rising gold prices, which climbed to US$4,200 an ounce in early October. The start of October also saw the U.S. federal government shut down after Congress failed to reach a funding deal. The 43-day shutdown – the longest in American history – ended November 12. The uncertainty created by the shutdown, in part due to a lack of economic data updates, clouded the financial market outlook for much of the quarter. With key statistics harder to find due, data-hungry investors leaned heavily on corporate earnings updates for economic insights.
Major U.S. banks beat Q3 expectations, with JPMorgan, Goldman Sachs, Wells Fargo, Citigroup and Morgan Stanley reporting strong year-over-year profit growth driven by surging investment banking revenue and robust trading performance. Big Tech also delivered strong Q3 results, with Alphabet, Microsoft, Meta, Amazon and Apple all beating revenue expectations on the back of cloud and AI growth. Tesla reported a 31% drop in profits despite record sales. Nvidia stole the spotlight with US$57 billion in revenue – up from US$35 billion a year earlier – and projected Q4 sales above US$65 billion.
The Bank of Canada announced another quarter-point interest-rate cut in October, but chose to hold at 4.45% in its December policy update. The Fed announced two rate cuts in the quarter, bringing its target range to 3.5% to 3.75%. Both central banks issued cautious statements following their December updates, signalling that any further rate moves will highly depend on incoming data. Check out these links to the 2026 policy update schedules for the Bank of Canada and the U.S. Federal Reserve.
A professionally managed portfolio provides advantages in an uncertain economic environment.
No matter the news headlines or market conditions, a professionally managed portfolio comes with a major benefit: diversification. With a diverse portfolio, you have access to several different asset classes, geographies, and investment styles, which lessens your risk if one segment of the market suffers heavy losses. Portfolio managers have the expertise to adjust allocations as market conditions change. A Co-operators financial representative is always ready to help if you have questions or would like to review your plan.
Investment Update (January 12).
Our weekly financial reports resume Monday, January 12. In the meantime, check out our 2026 outlook, for insight into some of the key challenges and opportunities that will shape market performance in the new year.
More important dates
- December 25: North American markets closed for Christmas Day
- December 26: Canada’s TSX closed for Boxing Day
- January 1: North American markets closed for New Year’s Day
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