| Index | Close | Week | Year to date |
|---|---|---|---|
| S&P/TSX Composite | 35,502.65 | -0.83% | 11.96% |
| Dow Jones Industrial Average | 51,176.96 | -1.26% | 6.48% |
| S&P 500 Index | 7,722.72 | -0.27% | 12.81% |
| Nasdaq Composite | 27,190.86 | 0.45% | 16.99% |
| 10-year Canadian Bond Yield | 3.93% | -0.01% | 0.51% |
| 10-year U.S. Treasury Yield | 5.28% | 0.11% | 1.10% |
| Canadian Dollar | US$0.7020 | -0.71% | -3.78% |
Prime Rate 4.45% |
|||
Weekly performance ended October 2, 2026.
Sources: Morningstar Direct, Bank of Canada and U.S. Department of the Treasury
Markets navigated rising bond yields
North American stock markets faced pressure through much of last week as rising government bond yields and interest-rate uncertainty weighed on sentiment. Several economic reports also came into focus as the week progressed.
Canada’s TSX fell 0.9% on Monday, reaching its lowest closing level since late July. Materials sector losses drove the decline as gold prices dropped sharply. In the U.S., the Dow lost 0.67%, while the S&P 500 and Nasdaq declined 0.77% and 0.92%, respectively. Despite the broader market weakness, chipmaker Nvidia rose 1.6% after announcing a record US$150 billion share repurchase program.
Markets moved moderately lower on Tuesday. The TSX slipped 0.1%, marking a second consecutive daily decline. On Wall Street, the Dow fell 0.26%, the S&P 500 declined 0.17% and the Nasdaq dropped 0.08%. Technology shares helped limit losses on both sides of the border, while easing oil prices took some pressure off markets.
Wednesday saw uneven performance as investors digested softer-than-expected U.S. inflation data and stronger U.S. economic growth figures. The Dow dropped 0.86% and the S&P 500 dipped 0.25%. At the same time, gains from several large technology companies drove the tech-heavy Nasdaq to a 0.24% gain. The TSX fell 0.63%, weighed down by weakness in mining shares.
On Thursday, the TSX edged down another 0.23% led by losses in financial, materials and telecom stocks. U.S. markets finished higher, with the Dow rising 0.04%, while the S&P 500 and Nasdaq gained 0.20% and 0.04%, respectively. Retreating bond yields and strength in technology helped drive performance.
Markets rebounded on Friday after a weaker-than-expected U.S. employment report strengthened expectations that the Federal Reserve could leave interest rates unchanged later this month. The TSX gained 0.99%, snapping a four-day losing streak, while the Dow rose 0.51%, the S&P 500 advanced 0.76% and the Nasdaq climbed 1.19%. Despite the late-week recovery, the TSX, Dow and S&P 500 all finished the week lower, while the Nasdaq posted a modest weekly gain.
Mixed economic data complicated the interest-rate outlook
U.S. economic reports provided conflicting signals and did little to settle the debate over future interest-rate decisions.
Labor Department statistics released Tuesday revealed job openings fell below forecasts to 7.1 million in August. A separate report from the Conference Board showed consumer confidence dropped to its lowest level in more than a decade.
Other indicators suggested the U.S. economy remained relatively resilient. Upwardly revised Q2 gross domestic product (GDP) data released Wednesday indicated the economy grew at a 2.2% annualized rate. The Personal Consumption Expenditures (PCE) Price Index, the U.S. Federal Reserve's preferred measure of inflation, rose 3.4% annually in August, below expectations of 3.7%, helping ease some concerns about inflation.
However, Friday's employment report pointed to a cooling labour market. U.S. employers added 29,000 jobs in September, well below the 90,000 economists expected. The unemployment rate edged up to 4.2% from 4.1% in August, while downward revisions removed a combined 60,000 jobs from July and August payroll figures.
Canada’s economy paused in July
After several months of growth, the Canadian economy lost momentum in July. Statistics Canada reported Tuesday that GDP was essentially unchanged from June, matching expectations and reflecting a broad economic slowdown. A preliminary estimate, however, suggested growth may have resumed in August, with GDP expected to rise 0.2%.
The flat July reading reflected a mix of strengths and weaknesses. Construction activity rose 1.3%, marking a fourth consecutive monthly increase, while strong electricity demand boosted the utilities sector. Those gains were offset by declines across manufacturing, mining, quarrying, oil and gas extraction, as well as retail and wholesale trade. Revised data also showed the economy grew 0.4% in June, slightly better than previously estimated.
The data arrived as Canada continues to navigate ongoing trade tensions with the United States. A new U.S. import ban affecting several Canadian products took effect Tuesday, while Deloitte Canada downwardly revised its outlook for the Canadian economy, citing tougher conditions for businesses and consumers. The firm now expects the economy to grow 1.6% in 2027, down from its previous 2.0% forecast.
Countless factors influence markets
Economic data, inflation reports, interest-rate decisions and geopolitical developments can all influence markets in the short term. While some factors are easier to anticipate than others, reacting to every headline can make it difficult to stay focused on long-term goals. Having an investment plan geared toward your personal objectives, risk tolerance and time horizon can help you navigate changing market conditions with confidence. If you have questions or would like to review your plan, a Co-operators financial representative is always ready to help.
Canadian employment data (October 9)
Investors will turn their attention to Canada’s September employment report on Friday. Statistics Canada’s August data showed the economy lost 42,000 jobs, while the unemployment rate remained unchanged at 6.4%. The latest figures will provide insight into the pace of economic growth and help shape expectations for the Bank of Canada’s next interest rate decision.
More important dates
- October 12: Canadian markets closed for Thanksgiving holiday
- October 28: Bank of Canada and U.S. Federal Reserve interest-rate announcements
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