Global Index Performance

Indices	Month-to-date on August 31 2026	Year-to-date on August 31 2026
Canadian Bonds1	-0.21%	0.44%
Canadian Large Cap Equities2	3.10%	16.01%
U.S. Large Cap Equities3	1.51%	14.42%
Developed Market Equities4	0.80%	15.54%
Emerging Market Equities5	2.18%	25.76%

Source: FactSet as of September 14, 2026.

Fixed Income & Economic Update*

Canadian bonds struggled in August as longer-term yields moved higher, weighing on broad fixed-income performance. The 10-year Government of Canada yield rose over the month and pushed into two-year-high territory, creating pressure on longer-duration bonds. The Bank of Canada did not meet in August, leaving its policy rate unchanged at 2.25%, a stance it subsequently reaffirmed at its September 2 meeting. With this seventh consecutive hold, the Bank flagged stronger upside inflation risks tied to energy prices and trade friction with the United States, even as the economy continued to be supported by stronger exports, household spending, and business investment. Canadian bond yields edged higher over the month as well, with the 10-year Government of Canada yield pushing into two-year-high territory.

Equities* 

The S&P/TSX Composite gained 3.1% in August, closing near a record high, with leadership concentrated in Materials, Financials and Energy. Materials led by a wide margin as the month’s historic gold rally lifted mining shares, with the index’s ten best-performing stocks all coming from the sector. A record close above 36,300 on August 7 capped the TSX’s best week in four months, helped by strength in miners and a surprisingly weak U.S. jobs report that tempered expectations for further rate hikes. Stronger bank earnings provided additional support later in the month, while Energy advanced on Strait of Hormuz-related supply concerns. A better-than-expected second-quarter GDP report also reinforced the domestic backdrop, while Utilities, Industrials and Real Estate lagged.

The S&P 500 rose 2.7% and the Nasdaq-100 gained 4.2%, marking their best August performances since 2021. Energy was the standout sector, advancing 7.0% and extending its 2026 gain to 44.2% year to date as renewed Hormuz tensions and a late-month oil spike reinforced its leadership. Participation also continued to broaden beyond the largest names. The equal-weighted S&P 500 had outpaced the cap-weighted index year to date through August, a reversal from the mega-cap-driven pattern of recent years, although that gap has narrowed sharply since as mega-cap names reasserted themselves in September. International markets had a record-setting month of their own: the STOXX 600, Germany's DAX, and France's CAC 40 all pushed to all-time highs in August. Emerging markets, the best-performing major asset class year-to-date, extended those gains in August, supported by an AI-driven rally in Taiwan and a weaker U.S. dollar.  

 

Broad Market Overview & Outlook

August data reinforced the resilience of economic activity and corporate earnings, while underscoring a more challenging backdrop for investors as higher energy prices, elevated interest rates, and ongoing trade uncertainty continued to raise the bar for generating returns. Developments since month-end have reinforced that tension: U.S. inflation remained firm enough for the Federal Reserve to raise rates for the first time since 2023, while renewed disruption to Middle Eastern energy infrastructure has kept inflation risks elevated. Canada–U.S. trade relations also remain unsettled following the breakdown of bilateral negotiations and the introduction of additional tariffs, although CUSMA remains fully in force until 2036 and will now move into annual reviews following July’s inconclusive joint review. Encouragingly, Canada’s manufacturing sector continued to expand in August for a fifth consecutive month, with both output and employment increasing despite persistent trade uncertainty.

Recent economic indicators suggest portions of the Canadian economy continue to adjust to higher costs and external pressures. For Canadian investors, these crosscurrents continue to favour diversification and selectivity: yields remain attractive for income-oriented portfolios, while healthy corporate fundamentals and evidence of domestic economic adaptation provide support for a balanced investment outlook despite a more complex global backdrop.  Investors should remain mindful that inflationary pressures, policy changes, geopolitical developments, and changing economic conditions may affect future market performance.

*Data sourced from FactSet as of September 14, 2026. 

 

 

 

1. As measured by the FTSE Canada Bond Universe Index
2. As measured by the S&P/TSX Composite Total Return Index
3. As measured by the S&P 500 Total Return Index in CAD
4. As measured by the MSCI EAFE Total Return Index in CAD
5. As measured by the MSCI EM Total Return Index in CAD