Toronto Stocks: TSX, Energy and Banks Daily — 2026-09-05
The S&P/TSX Composite Index closed lower on Friday, September 5, dropping 0.33% as investors reacted to the Bank of Canada's decision to hold interest rates steady at 2.25%. While energy stocks provided some support due to rising oil prices, the broader market was weighed down by declining precious metals and rising bond yields. Meanwhile, Canada confirmed retaliatory tariffs on U.S. goods will begin September 8, adding a new layer of trade uncertainty to the financial landscape.
Toronto Stocks: TSX, Energy and Banks Daily — 2026-09-05
Bank of Canada holds rates, market reaction muted
On Wednesday, September 2, the Bank of Canada (BoC) decided to maintain its overnight rate target at 2.25%, marking the sixth consecutive hold. The central bank cited persistent economic uncertainty and an economy that remains in a situation of excess supply despite signs of growth resumption in Q2. Following the decision, TSX futures showed little movement, with markets largely pricing in a prolonged pause until at least early 2027. Desjardins economists project the rate will remain at 2.25% through the end of 2026, with potential hikes beginning in the first half of 2027.
TSX closes lower amid rising yields and weak metals
The S&P/TSX Composite Index ended Friday’s trading session down 0.33%, pressured by rising bond yields and a decline in precious metal prices. Earlier in the week, on Tuesday, September 1, the index had already seen declines as tech and bank stocks slid amid Middle East tensions and inflation worries, erasing a month of gains. Energy stocks were one of the few bright spots, gaining on upticks in oil prices, which helped cushion some of the broader market losses.
Canada confirms retaliatory tariffs start September 8
Prime Minister Mark Carney announced that Canada will impose retaliatory tariffs on U.S. goods starting September 8, targeting over 300 metals products including flat-rolled steel and aluminum bars. This move is a direct response to new 50% tariffs imposed by the U.S. administration on certain Canadian exports after trade talks failed. The escalation has heightened exposure risks for Canadian exporters, particularly in the materials and energy sectors, which are heavily integrated with U.S. supply chains.
Local view
French-language financial media highlighted the mixed market reaction to the Bank of Canada's rate hold. Les Affaires reported on individual stock movements, noting that Alimentation Couche-Tard fell 2.4% on September 2, reflecting broader consumer discretionary weakness. Le Devoir noted that while the BoC held rates, financial markets are increasingly betting that the rate will eventually rise above 3% in the medium term, signaling that the current pause may be temporary.
Context & numbers
- Interest Rates: The Bank of Canada's overnight rate remains at 2.25%, unchanged since October 2025.
- Bank Earnings: Canada’s Big Six banks all topped analyst expectations in Q3 2026 earnings, though market reaction was mixed due to high valuations.
- Trade Tariffs: U.S. tariffs on some Canadian exports are now at 50%; Canadian retaliatory tariffs will range from 15% to 50% on over 700 American goods starting September 8.
- Market Performance: The TSX had previously outperformed the S&P 500 year-to-date (+15.13% vs +12.69%) but has faced recent headwinds from geopolitical tensions and trade disputes.
On the radar
- September 8 Tariff Implementation: Investors are watching for the immediate market impact of Canada’s retaliatory tariffs on U.S. steel, aluminum, and electronics taking effect.
- U.S. Non-Farm Payrolls: As noted by Schwab, upcoming U.S. labor data could influence global bond yields and, by extension, Canadian fixed-income markets and the loonie.
- Metals Volatility: With trade wars intensifying, metals and materials stocks remain volatile; CNBC warns long-term investors to be wary of repricing in this sector.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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