TSX Edges Lower Following Jobs Data

The S&P/TSX Composite Index edged lower to trade near 36,500 on Friday following the release of domestic and US employment data. Employment in Canada declined by 41,700 in August, missing expectations for a 15,000 increase and following a 75,100 gain in July. The weak labor data could support a more dovish stance from the BoC. However, despite keeping rates unchanged on Wednesday, Governor Macklem said policymakers were prepared to raise rates if inflation remained elevated. Meanwhile, US payrolls increased by 162,000, about three times the consensus estimate. The strong report boosted expectations for a September Fed rate hike, putting pressure on credit-sensitive stocks. Major banks traded near flat, while Brookfield fell more than 0.5%. Gold prices declined, weighing on mining shares that have supported the index in recent months. Agnico Eagle, Barrick, and WPM each shed about 2%. Oil prices also fell, pressuring energy producers, with Canadian Natural down nearly 1%.

Canadian equity futures edged lower on Friday following the release of domestic and US employment data. Employment in Canada declined by 41,700 in August, missing expectations for a 15,000 increase and following a 75,100 gain in July. The weak labor data could support a more dovish stance from the BoC. However, despite keeping rates unchanged on Wednesday, Governor Macklem said policymakers were prepared to raise rates if inflation remained elevated. Meanwhile, US payrolls increased by 162,000, about three times the consensus estimate. The stronger-than-expected report boosted expectations for a September Fed rate hike, putting pressure on credit-sensitive stocks. Gold prices fell, weighing on mining shares that have supported the index in recent months. Oil prices also declined, pressuring energy producers while offering some relief on energy-driven inflation concerns.

The S&P/TSX Composite Index rose 1.5% to close at 36,633 s as bets on a US Fed rate hike in September eased. US Fed Governor Waller said that he was inclined to be patient on monetary policy while monitoring whether price pressures continue to ease. Following his comments, markets trimmed expectations for a Fed rate hike, while both Canadian and US government bond yields retreated from their 2025 highs. Banks advanced, with RBC up 1.6% and both BMO and CIBC gaining 1.8%. Gold prices rose, driving miners higher. Agnico Eagle jumped 5%, Barrick gained 3.1%, and WPM added 3.7%. Technology stocks posted sharp gains amid a rally in US hyperscalers. Shopify rose 2.3%, while Celestica soared 11.3% as hyperscaler capital expenditure continued to fuel rapid expansion in high-performance AI computing and enterprise hardware. Meanwhile, despite the BoC keeping rates unchanged on Wednesday, Governor Macklem said policymakers were prepared to raise rates if inflation remained elevated.