- The S&P 500 rose 0.51% to 7,743 and the NASDAQ gained 0.48% to 27,069, extending a late-September rally on stable Fed policy expectations.
- USD/CAD at 1.4143 means unhedged U.S. equity ETF holders in TFSAs and RRSPs are earning a significant currency premium on top of equity gains.
- WTI crude surged 1.96% to US$94.22/bbl, making U.S. energy stocks the top sector performer and a strategic overweight candidate for Canadian portfolios.
- Gold dropped 3.23% and silver fell 4.05%, signalling a risk-on rotation away from defensive assets that could pressure precious metals holdings short-term.
The S&P 500 advanced 0.51% to close at 7,743 on September 28, 2026, extending a late-month rally driven by resilient U.S. economic data and receding fears of a near-term Federal Reserve rate hike. The NASDAQ Composite added 0.48% to 27,069, with large-cap technology names leading the charge as bond yields stabilized. Both indexes are on pace for a positive close to the third quarter, a meaningful shift from the volatility that defined June and July.
The USD/CAD Effect: A Silent Return Booster
For Canadian investors, today’s market moves come with an important asterisk: the U.S. dollar is trading at 1.4143 CAD, near multi-year highs. That means every 1% gain in a U.S.-listed S&P 500 ETF — say, a TFSA holding in iShares Core S&P 500 ETF (IVV) or Vanguard S&P 500 ETF (VOO) — translates to approximately 1.51% in Canadian dollar terms when currency appreciation is factored in year-to-date. Investors holding unhedged U.S. equity ETFs have received a meaningful currency tailwind in 2026. By contrast, holders of CAD-hedged products such as XSP (iShares S&P 500 Index ETF CAD-Hedged) have captured the equity gain but surrendered the FX premium — a difference that has compounded materially this year.
Energy Leads Sector Rotation as Crude Surges
WTI crude oil jumped 1.96% to US$94.22 per barrel on Monday, pushing the energy sector to the top of the S&P 500 sector leaderboard. Integrated oil majors including ExxonMobil (XOM) and Chevron (CVX) were among the session’s strongest performers, benefiting from tightening supply signals out of OPEC+. Meanwhile, gold fell sharply, dropping 3.23% to US$4,181.50/oz — a reminder that risk-on rotation is pulling capital away from defensive havens. Silver declined an even steeper 4.05% to US$61.65/oz, with copper also slipping 0.96% to US$6.63/lb, suggesting some caution remains around global industrial demand.
Fed Policy Watch: The Rate Pause Holding Firm
The Federal Reserve’s extended rate pause continues to underpin equity valuations at elevated multiples. With the S&P 500 now trading above 7,700, forward price-to-earnings ratios remain stretched by historical standards, but the absence of imminent tightening has kept institutional money flowing into equities. Fed officials speaking this week have reiterated a data-dependent stance, and September’s core PCE print — due later this week — will be a critical test of whether that pause holds into Q4 2026. Any upside inflation surprise could quickly reverse today’s gains.
Canadian Portfolio Implication: Stay Unhedged, Tilt Toward Energy
For Canadian retail investors managing TFSA or RRSP allocations, the current environment makes a compelling case to maintain or increase unhedged U.S. equity exposure while the loonie remains under pressure near 70.7 U.S. cents. Switching to CAD-hedged ETFs at this stage would lock in the equity upside but forfeit ongoing FX benefit — a trade-off that appears unfavourable given the Bank of Canada’s comparatively dovish posture. Within U.S. equities, overweighting the energy sector via products like XLE (Energy Select Sector SPDR) aligns with today’s crude momentum and provides a partial commodity hedge. Investors should remain underweight gold and silver proxies in the near term, as today’s sharp precious metals selloff signals a rotation away from defensive positioning.
