Market recap: Week ended September 11, 2026

Markets pulled back in a holiday-shortened week

After the Labour Day holiday closed North American markets on Monday, trading resumed on a cautious note Tuesday. Canada’s TSX fell 0.8%, pressured by losses in technology, industrial and financial shares. In the U.S., the Dow declined 1.2%, while the S&P 500 and Nasdaq fell 0.6% and 0.3%, respectively. Investors focused on escalating tensions in the Middle East, which pushed oil prices higher and renewed inflation concerns.

Selling pressure continued Wednesday as investors reassessed the interest-rate outlook amid rising oil prices. The TSX lost another 0.6%, while the Dow fell 0.8%. The S&P 500 declined 0.5% and the Nasdaq dropped 0.6%.

Stocks extended their losses Thursday as inflation concerns continued to weigh on investor sentiment. The TSX dropped 1.1% after oil prices climbed above US$100 per barrel for the first time since May. In the U.S., the Dow fell 0.6%, while the S&P 500 and Nasdaq declined 0.6% and 0.7%, respectively, marking a fourth consecutive day of losses across the major U.S. indexes. A widely anticipated wholesale inflation report did little to ease concerns that persistent price pressures could influence the U.S. Federal Reserve’s (the Fed) interest-rate decision next week.

Markets rebounded Friday as oil prices cooled and investors digested another U.S. inflation report. The TSX rose 0.5%, helped by gains in technology shares. U.S. markets also moved higher, with the Dow gaining 1.0%, while the S&P 500 and Nasdaq advanced 0.9% and 1.0%, respectively. Although the latest U.S. consumer price data reinforced expectations that the Fed may raise interest rates, investors welcomed signs that oil prices had eased from recent highs.

Rising energy costs kept inflation in the spotlight

On Thursday, the monthly U.S. Producer Price Index (PPI) update showed wholesale inflation rose 5.4% annually in August, up from 4.8% in July. Much of the increase was attributed to higher energy costs, reflecting the sharp rise in oil prices over recent weeks. On a monthly basis, producer prices increased 0.4%, matching economists’ expectations.

Investors received further evidence Friday that inflation pressures remain elevated. The release of the U.S. Consumer Price Index (CPI) showed prices rose 3.4% year-over-year in August. On a monthly basis, inflation accelerated to 0.4%, up from 0.1% in July, with higher gasoline prices contributing to the increase.

While each report showed underlying measures of inflation were more moderate, the data reinforced concerns that rising energy costs could slow the Fed’s progress in bringing inflation under control.

Canada-U.S. trade dispute entered a new phase

On Tuesday, previously announced retaliatory tariffs in the Canada-U.S. trade dispute officially took effect. Canada implemented tariffs ranging from 15% to 50% on roughly $28 billion worth of U.S. products. The federal government described the measures as a dollar-for-dollar response to tariffs imposed by the U.S. following the collapse of trade negotiations last month. The affected products span a broad range of industries, including steel, aluminum, industrial products and consumer goods.

The U.S. responded with additional measures of its own. The White House announced plans to restrict imports of certain Canadian products, including most alcoholic beverages and motorcycles, while expanding the list of Canadian goods subject to higher tariffs. Although the economic impact of the latest measures remains uncertain, investors continue to monitor the potential effects on business investment, supply chains and economic growth on both sides of the border.

While trade tensions have remained a source of uncertainty in recent weeks, markets have focused more on the potential inflationary impact of higher energy prices and the implications for monetary policy. Nevertheless, the latest developments suggest the dispute could remain an important economic consideration in the months ahead.