Global Index Performance

Indices	Month-to-date at January 31  2026	1 year to January 31 2026
Canadian Bonds1	0.58%	2.02%
Canadian Large Cap Equities2	0.84%	28.32%
U.S. Large Cap Equities3	0.64%	9.01%
Developed Market Equities4	3.95%	23.27%
Emerging Market Equities5	7.54%	34.33%

Source: FactSet as of February 9, 2026.

Fixed Income*

In late January, the Bank of Canada maintained its policy stance, holding the overnight rate at 2.25%, with inflation expected to remain close to the 2% target. Over the next couple of years, the Bank anticipates modest economic expansion, shaped by slower population growth and ongoing adjustments to a more protectionist U.S. trade environment. While consumer spending has remained resilient and business investment is expected to improve gradually, uncertainty around the upcoming review of the Canada–U.S.–Mexico Agreement (USMCA) and elevated geopolitical risks continue to temper confidence. In the United States, the Federal Reserve also held rates steady in January, keeping the federal funds target range at 3.50%–3.75%. With the nomination of the new Fed Chair, investors are parsing early remarks for signals on policy direction and inflation tolerance. Markets currently expect a steady, data‑driven approach that balances persistent inflation pressures with the need to sustain economic momentum. U.S. growth remains solid, supported by resilient consumer spending and strong AI‑related capital investment.

Equities* 

Equity markets began 2026 on constructive footing, though gains were more measured than the strong rallies seen in 2025. Canadian equities moved higher, with the S&P/TSX Composite reaching record levels during the month before a late-January pullback. Performance was supported by strength in energy and materials, rising precious-metal prices, and the relative stability of financials. Gold and silver prices strengthened into the end of January amid geopolitical uncertainty and continued central-bank demand. Canada’s resource-heavy market continued to benefit from commodity exposure, while domestic growth expectations remained restrained amid trade realignment and modest economic expansion.

In the United States, major indices posted modest advances, with the S&P 500 rising approximately 1.4% for the month amid improving market breadth. Leadership broadened beyond mega-cap technology toward more cyclical and value-oriented sectors, while earnings season highlighted both the continued potential of artificial intelligence coupled with a growing scrutiny over elevated capital spending. 

Outside North America, international and emerging-market equities outperformed. Developed markets were supported by improving sentiment in Europe and Japan as well as the benefit of a softer U.S. dollar. Emerging markets outperformed more decisively, with returns amplified by currency appreciation, and strong gains drive by AI-related semiconductor demand in Asia and selective commodity strength in Latin America. These trends reinforced the diversification benefits of maintaining global equity exposure.

 

Market Outlook

January underscored a balanced but watchful investment environment. Economic fundamentals and corporate earnings remain supportive, while central banks appear firmly in a pause phase. At the same time, Canada is navigating deeper structural shifts: slower labour-force growth, a re-shaping of trade relationships with the United States, and the accelerating impact of artificial intelligence on productivity and capital allocation. Inflation is expected to stay near target, but uncertainty, particularly around trade policy and geopolitics, continues to weigh on long-term investment decisions. In this context, diversification across asset classes and regions remains critical. High-quality fixed income provides stability and income, equities offer selective growth opportunities amid broader market participation, and global exposure helps mitigate domestic and regional risks. As 2026 unfolds, we remain focused on disciplined portfolio construction, balancing opportunity with resilience as Canada adapts to a changing economic landscape.

*Data sourced from FactSet as of February 9, 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