TSX Falls Amid Losses in Banking and Mining

The S&P/TSX Composite Index fell nearly 0.5% to below 35,500, weighed down by losses from major banks and miners. Global yields remained elevated near multi-year highs amid concerns over persistent energy-driven inflation, rising fiscal risks and increasing debt issuance linked to artificial intelligence. Credit-sensitive stocks posted losses, with RBC and TD Bank down more than 0.5%. Mining shares also declined as gold prices pared gains, with Agnico Eagle shedding nearly 1.5% and Barrick losing more than 1.5%. Elsewhere, Suncor (-1.5%) said it had agreed to sell its interests in three offshore oil assets to Ithaca, while Cenovus (-4%) said it would acquire Athabasca Oil in a cash-and-stock transaction. Energy stocks were also pressured as the oil rally stalled.

Futures tracking Canada’s stock exchange edged higher on Monday as oil prices fell on easing supply pressures, reducing inflation concerns. Oil prices eased as flows through the Strait of Hormuz recovered, while the G7’s latest emergency stockpile release also weighed on prices. The halt in the oil rally offered some respite to credit-sensitive stocks that have been under pressure from energy-driven inflation worries. Meanwhile, Friday’s soft US jobs report reduced the odds of an imminent rate hike by the US Federal Reserve, further supporting those equities. While odds of an October rate hike by the Bank of Canada have receded, investors still expect the central bank to raise rates at least once before the end of 2026. Gold prices rose, lending support to mining shares. Elsewhere, Suncor said it had agreed to sell its interests in three offshore oil assets to Ithaca. Cenovus said it would acquire Athabasca Oil in a cash-and-stock transaction.

The S&P/TSX Composite Index rose 1% to close at 35,503 as the oil rally stalled, easing concerns over energy-driven inflation and pushing Canadian bond yields lower. Softer-than-expected US payrolls also supported rate-sensitive stocks as expectations of a Fed rate hike this month declined. Financials gained, with CIBC up 1.1% and Great-West Lifeco rising 2%. Technology stocks advanced as well, tracking strength in the Wall Street AI trade, with Shopify up 1.7% and Celestica jumping 3.9%. Miners gained despite lower gold prices, as reduced expectations of a Fed rate hike following the weaker US jobs data supported the outlook for the metal. Agnico Eagle rose 2.1%, while WPM added 2.6%. Meanwhile, Prime Minister Carney said Canada will fast-track approval of a proposed crude oil export pipeline to the West Coast, a key part of his efforts to diversify the economy away from the US.