Market recap: Week ended June 5, 2026

Stock markets lost ground

Standout performances by AI stocks helped the major U.S. stock markets advance on Monday. The S&P 500 and Nasdaq gained 0.3% and 0.4%, respectively, on their way to record closing highs. The Dow edged up 0.1%. In Canada, the TSX slipped 0.1%, as strength in technology shares was offset by weakness in materials and financials.

On Tuesday, all the U.S. benchmarks finished at record levels after U.S. President Trump announced that Israel and Hezbollah had agreed to halt attacks, and that talks between the U.S. and Iran were proceeding “at a rapid rate.” The Dow rose 0.5%, while the Nasdaq and S&P 500 edged up over the flat line. The TSX added 0.9% and surpassed the 35,000-point level for the first time. Support came from energy and financial stocks.

The upward momentum reversed on Wednesday, snapping Wall Street’s multi-session win streak, as oil prices moved higher amid reports of renewed tensions in the Middle East. This raised investor concerns about inflation and tempered risk appetite. Influential AI-related stocks, Nvidia, Dell and Oracle suffered losses that weighed on the broader market. The S&P 500 fell 0.7%, the Nasdaq declined 0.9% and the Dow dropped 1.2%. The TSX also moved lower, falling 1.1%, as broad-based weakness from the technology and materials sectors weighed on the index.

Investor sentiment improved on Thursday, as oil prices eased and investors rotated toward sectors that had lagged the recent rally. The Dow surged 1.7% to a fresh record high, while the S&P 500 gained 0.4%. The Nasdaq slipped 0.1%, as weakness in several AI-related names offset the broader strength. In Canada, the TSX rose 1.2% to another record close, supported by gains in the materials sector.

Stock markets moved sharply lower on Friday. Losses for AI-related stocks continued to weigh on the major Wall Street indexes, as stronger-than-expected U.S. employment data reinforced expectations that interest rates could remain higher for longer. The Nasdaq led the way lower with a 4.2% decline, while the S&P 500 dropped 2.6% and the Dow fell 1.3%. In Canada, the TSX also pulled back, falling 2.3%, with weakness in technology and materials shares pressuring the index.

North American trade talks gained traction

Last week, investors turned their attention to the upcoming Canada–United States–Mexico Agreement (CUSMA) review. The three countries must decide whether they want to renew or renegotiate the pact by July 1.

Canada formally indicated it wants a full 16-year renewal of the agreement, with Trade Minister Dominic LeBlanc stating that CUSMA has been “highly beneficial” to all three economies and remains critical to North American competitiveness. LeBlanc, who met with U.S. officials in Washington on Tuesday, acknowledged that negotiations can be uneven, but said he remains “optimistic” that progress can be made.

At the same time, U.S. officials have signalled interest in revisiting several provisions of the agreement, while also maintaining sectoral tariffs. Prime Minister Mark Carney noted that talks involve a “series of technical issues,” alongside broader questions tied to strategic industries like autos, steel and energy. He also indicated that negotiators have made “some progress,” but that more work remains.

The stakes for financial markets are meaningful. CUSMA underpins a highly integrated North American economy and governs a substantial share of cross-border trade. While the agreement is not set to expire in the near term, the tone and direction of negotiations could influence business investment, supply chains and market confidence in the months ahead.

Employment data points to continued resilience

The latest data for Canada and the U.S. suggested labour markets remained resilient in May, with job creation exceeding expectations on both sides of the border.

In Canada, the economy added 88,000 jobs during the month, well above expectations, while the unemployment rate declined to 6.6% from 6.9% in April. Gains were largely concentrated in full-time positions and spanned a range of industries, led by strength in construction and transportation. While average wage growth moderated compared to the previous month, the overall data showed that the labour market remains relatively firm, despite signs of slower economic growth earlier in the year.

In the U.S., employers added 172,000 jobs in May, also surpassing forecasts, while the unemployment rate held steady at 4.3%. Hiring in sectors such as leisure and hospitality, health-care, and government supported the gains. Revisions to prior months showed stronger-than-previously reported job creation, reinforcing the view that the U.S. labour market remains stable.

The labour market reports come ahead of central bank decisions next week. These trends will be an important factor shaping the outlook for interest rates.