- The TSX Composite closed July 31 at 35,226, down 0.79% or roughly 280 points, underperforming U.S. benchmarks sharply.
- Energy was the top-performing TSX sector; CNQ rose 1.8% and CVE gained 1.5% as WTI crude climbed to US$84.62/bbl.
- Financials led declines with RBC and TD each falling more than 1.4%, pressured by U.S. dollar strength and mortgage-risk concerns.
- Canadian June GDP and U.S. July Non-Farm Payrolls both print at 8:30 AM ET Friday — two market-moving data points in one shot.
The TSX Composite closed July’s final session at 35,226, down 280 points or 0.79% on the day, a stark contrast to Wall Street where the S&P 500 gained 0.70% to 7,490 and the NASDAQ surged 1.00% to 25,374. Volume on the TSX was above the 30-day average, suggesting the selling was broad-based and conviction-driven rather than a summer-doldrums drift. For Canadian investors, it was a frustrating close to what had been a choppy month.
What Dragged the TSX Lower
Financials were the session’s biggest drag, with Canada’s Big Six banks broadly lower as investors rotated capital south of the border into U.S. tech names. Royal Bank of Canada (RY) shed 1.4% to close at approximately $176.20, while TD Bank (TD) fell 1.6% to near $88.40 — both stocks pressured by lingering concerns over domestic mortgage renewal risk heading into the back half of 2026. The materials sector also underperformed despite a mixed commodities backdrop, with silver’s 1.41% decline to US$57.98/oz (roughly C$79.65 at current exchange) weighing on silver royalty and streaming names.
Winners: Energy and Base Metals Found Buyers
Not everything finished in the red. Energy was the day’s standout sector winner, lifted by WTI crude climbing 1.23% to US$84.62/bbl and Brent rising 1.22% to US$90.12/bbl. Canadian Natural Resources (CNQ) added 1.8% to close near $54.30, and Cenovus Energy (CVE) gained 1.5% to approximately $27.80, both benefiting from the oil price tailwind and robust summer demand signals out of the U.S. Copper’s 1.23% advance to US$6.524/lb gave base-metal miners a modest lift, with Teck Resources (TECK.B) ending the day up roughly 0.9%.
The News Behind the Moves
The divergence between Canadian and U.S. markets was the story of the session. A stronger-than-expected U.S. PCE inflation reading — the Federal Reserve’s preferred inflation gauge — came in cooler than forecast for June, reigniting bets on a September Fed rate cut and sending U.S. equities higher. That same data point, paradoxically, strengthened the U.S. dollar against the loonie, adding pressure to Canadian bank earnings outlooks and compressing TSX valuations in relative terms. Gold held firm at US$4,104.40/oz (approximately C$5,639), up a modest 0.10%, as the precious metal digested its extraordinary year-to-date run with little drama.
What to Watch on August 1
Friday brings a critical data dump for Canadian investors. Statistics Canada releases June GDP at 8:30 AM ET — the consensus estimate is for flat-to-modest growth of 0.1% month-over-month, and a miss could further weaken the loonie and pressure rate-sensitive sectors. South of the border, the U.S. July Non-Farm Payrolls report drops simultaneously at 8:30 AM ET; any significant beat or miss will set the tone for Fed rate-cut expectations heading into August. Overnight, watch for any developments out of OPEC+ following today’s oil price strength — a production commentary could move energy names at the open. Earnings season also continues, with several TSX-listed industrials and one major Canadian insurer reporting before the bell.
