TSX Set for Fifth Monthly Gain

The S&P/TSX Composite Index fell nearly 1% to trade below 36,500 on Monday, weighed down by losses in mining shares. Gold prices moved lower as renewed tensions in the Middle East fueled inflation concerns, while hawkish comments from Federal Reserve Chair Kevin Warsh strengthened expectations for a September rate hike. Agnico Eagle and Barrick shed more than 2%, while WPM lost nearly 3%. Tech stocks also declined, tracking losses among US hyperscalers, with Shopify sliding 5% and Constellation Software down nearly 1%. Major banks traded near the flatline, supported by a batch of strong earnings reports last week despite renewed inflationary pressures. The Bank of Canada will announce its next policy decision on Wednesday and is widely expected to keep its benchmark rate unchanged at 2.25%. In contrast, higher crude prices supported energy producers, with Canadian Natural and Suncor rising more than 2.5%, while Imperial Oil and Cenovus gained over 2%.

Futures tracking Canadian equities inched higher on Monday, putting the stock market on track for a fifth consecutive monthly gain. A rally in mining stocks, driven by higher metal prices, particularly gold, has supported the index in recent months. Oil prices rebounded on Monday as tensions in the Middle East escalated, with the US and Iran exchanging strikes for the first time in roughly a month and fresh concerns emerging over shipping through the Strait of Hormuz. Higher crude prices supported energy producers while weighing on financials and the broader market amid renewed concerns over energy-driven inflation. The Bank of Canada will announce its next policy decision on Wednesday and is widely expected to keep its benchmark rate unchanged at 2.25%. Meanwhile, expectations for a US Fed rate hike in mid-September increased after Chair Warsh reiterated the central bank’s commitment to bringing inflation down in his Jackson Hole speech on Friday.

The S&P/TSX Composite Index fell 0.8% to close at 36,554 on Friday, weighed down by losses in mining and energy stocks. Mining shares declined sharply as gold prices fell following hawkish commentary from Federal Reserve Chair Kevin Warsh, which strengthened expectations for a rate hike next month. Agnico Eagle tumbled 3.8%, Barrick lost 3.1%, WPM retreated 2.6%, and Kinross shed 3.5%. Energy producers also declined as oil prices fell after flows through the Strait of Hormuz increased and Iran and Oman agreed on a revenue-sharing framework for the waterway. Canadian Natural fell 1.3%, Suncor lost 1.1%, and Imperial Oil shed 1%. AI-infrastructure stocks tracked losses in US chipmakers, with Shopify down 0.6% and Celestica tumbling 5.5%. Financials and the broader market held up better, supported by Canada’s GDP growth of 3.3% in Q2, its strongest pace in nearly two years.