Market recap: Week ended October 9, 2026

Markets swung between record highs and pullbacks

The major North American stock indexes started the week on a positive note, supported by an early rally in technology shares and some relief from elevated U.S. Treasury yields. Canada’s TSX edged up 0.04% on Monday before gaining 0.37% on Tuesday to reach its highest closing level in nearly two weeks. In the U.S., the Dow gained 0.18% on Monday, while the S&P 500 rose 0.66% and the Nasdaq climbed 1.05% to a record close. The S&P 500 and Nasdaq both reached record highs on Tuesday as the Dow advanced another 0.49%.

The tone shifted midweek as government bond yields moved higher and concerns about inflation and interest rates resurfaced. The TSX fell 1.70% on Wednesday, its steepest decline in more than three months. In the U.S., the Dow lost 0.7%, while the S&P 500 and Nasdaq each slipped 0.22%. Higher borrowing costs weighed on financial and technology shares.

Canadian stocks recovered some ground on Thursday. The TSX rose 0.30% as energy and materials shares benefited from a sharp increase in oil prices and a rebound in gold. On Wall Street, however, the S&P 500 fell 0.47% and the Nasdaq lost 1.25%, while the Dow edged up 0.10%. The differing performances highlighted the contrasting influence of rising oil prices on the resource-heavy Canadian market and the technology-driven U.S. indexes. Investors also continued to monitor developments in the Middle East, which remained an important source of market uncertainty.

Markets ended the week on a stronger note Friday, as oil prices stabilized and Treasury yields remained below the highs reached earlier in the week. The TSX rose 1.48%, its biggest daily gain in five weeks. In the U.S., the Dow gained 0.83%, the S&P 500 rose 0.59% and the Nasdaq added 0.64%. Despite several sharp swings during the week, the TSX finished up 0.46%. The Dow gained 0.93% for the week, while the S&P 500 rose 1.15% and the Nasdaq added 0.64%.

Higher bond yields tested the technology-led rally

Early in the week, investor enthusiasm for AI helped push major U.S. benchmarks to new highs. Semiconductor companies Marvell Technology and AMD were among Tuesday’s notable gainers after both offered encouraging outlooks tied to demand for AI-related infrastructure. The developments reinforced expectations that technology spending remains an important driver of corporate growth.

At the same time, government bond yields remained near their highest levels in more than two decades. The benchmark U.S. 10-year Treasury yield climbed to approximately 5.36% on Wednesday, its highest level since 2002. Rising yields can increase borrowing costs for households and businesses while making fixed-income investments more attractive relative to stocks. Technology and financial shares subsequently came under pressure as investors considered the effects of higher borrowing costs.

The week’s trading also highlighted how much recent market strength has depended on a relatively small group of large technology companies. Nvidia, Apple and Microsoft together accounted for roughly one-fifth of the S&P 500, giving their performance considerable influence over the index. For investors, this offered a reminder that record index levels do not necessarily reflect equally strong performance across the broader market.

Fed signals and economic data kept interest rates in focus

On Wednesday, minutes from the U.S. Federal Reserve's September meeting indicated that policy-makers still see the possibility of another interest-rate increase before year-end. While investors do not currently expect an immediate move, the minutes reinforced the view that inflation remains a concern and that policy-makers are reluctant to declare victory over rising prices too soon.

While the Fed minutes provided insight into policymakers' thinking, economic data released earlier in the week also offered insight into the interest-rate outlook. On Monday, the Institute for Supply Management's Services Purchasing Managers Index registered 54.9 in September, indicating that business activity continued to expand, although at a slightly slower pace than the previous month. The result helped explain why interest-rate expectations remained unsettled despite signs of slowing growth elsewhere in the economy.

In Canada, a Statistics Canada report released on Friday showed that the economy lost 68,300 jobs in September, far worse than economists had expected. The unemployment rate edged up to 6.5% from 6.4% in August, marking a second consecutive month of job losses. The disappointing report added to evidence that Canada's labour market is losing momentum as the Bank of Canada's next interest-rate decision approaches later this month. While the data reduces pressure on the central bank to raise rates in the near term, policy-makers must also contend with persistent inflation concerns and a global environment characterized by elevated borrowing costs.

For investors, the week's economic reports offered a reminder that the paths forward for the Canadian and U.S. economies may not be moving in lockstep.