Key Takeaways
- TSX Composite gained 108 points Thursday, closing at 24,847 its highest level since February.
- Financial sector stocks led gains as rate-hold decision removed near-term uncertainty for banks.
- Royal Bank, TD, and BMO each rose more than 1.5%, adding significant index weight.
- Options market now pricing just 18% probability of a cut at the September 17 meeting.
The TSX Composite Index surged 108 points Thursday after the Bank of Canada held its overnight rate at 2.75%, a decision that removed near-term uncertainty and triggered a broad rally in rate-sensitive financial stocks. The index closed at 24,847, its highest print since the February peak, and is now within 53 points of the all-time intraday high set on February 14.
Financials Lead the Charge
The financial sector, which accounts for roughly 33% of the TSX’s total weight, led all sectors Thursday. Royal Bank of Canada climbed 1.8% to C$154.20, while Toronto-Dominion Bank gained 1.6% and Bank of Montreal added 1.5%. The S&P/TSX Capped Financials Index rose 1.4%, its best single-session gain in three months.
The rate hold was widely anticipated 31 of 32 economists surveyed by Bloomberg had forecast no change but the devil was in Governor Macklem’s language. The statement struck a notably cautious tone on trade uncertainty, signalling the BoC sees more downside risks than previously communicated.
“The governing council remains attentive to the interplay between tariff pressures and domestic demand.”
Bank of Canada Statement, July 3, 2026
What the Data Shows
| Sector | Thursday Move | YTD Return |
|---|---|---|
| Financials | +1.4% | +12.8% |
| Energy | +0.9% | +6.2% |
| Materials | +0.7% | +18.4% |
| Technology | +0.5% | +22.1% |
| Utilities | -0.2% | +4.1% |
What Comes Next
Analysts at RBC Capital Markets raised their year-end TSX target to 25,500 on Thursday evening, citing resilient corporate earnings and a commodity tailwind from gold and uranium prices. The key watch point for July is the domestic inflation print due July 22, which will shape expectations for the September rate decision.
Technically, the TSX faces resistance at 24,900, the former February high. A close above that level on elevated volume would likely trigger momentum-driven buying from quant funds that have been underweight Canadian equities since Q1. The 14-day RSI sits at 62 elevated but not yet overbought.