Tuesday, August 25, 2026
Canadian markets head into Tuesday with a fresh trade shock to digest. President Trump said Monday he'd raise tariffs on Canadian automobiles, auto parts and steel to 50% starting January 1, 2027, posting on Truth Social that "Canada will be treated like a State no longer!" — a sharp escalation just two days after the existing 50% tariffs on roughly $28 billion of other Canadian goods took effect. The threat came even as Canadian Prime Minister Mark Carney's promised retaliatory tariffs, set to begin September 8, remain on the calendar.
The loonie took the hit directly, sliding to 72.24–72.27 US cents (about 1.383–1.385 USD/CAD) Monday, down roughly half a cent from Friday's 72.67 cents and pulling well off last week's multi-week high. The TSX, by contrast, still closed higher, propped up by a record-setting rally in gold. Wall Street was more mixed, with chip stocks dragging the S&P 500 and Nasdaq lower even as the Dow eked out a gain.
🇨🇦 Canadian Markets
| Index | Close | Change |
| S&P/TSX Composite | 36,714.12 | +93.89 (+0.26%) |
| Canadian Dollar (USD/CAD) | ~72.25 US¢ (1.3841) | -0.4 to -0.6% |
The TSX finished Monday's session in positive territory even as new U.S. tariffs took hold, with gold miners doing most of the heavy lifting. Materials and mining names rallied hard as bullion pushed to fresh records, while industrials and autos struggled — Magna International shed nearly 4%, and both BRP and Linamar fell close to 1.5% on the fresh tariff threat. Big banks were mostly lower amid the tariff uncertainty and ahead of a busy week of Q3 bank earnings, with BMO and Scotiabank reporting Tuesday, National Bank Wednesday, and CIBC, RBC and TD on Thursday.
The loonie's slide reflects both the Canada-specific tariff story and a broader firming of the U.S. dollar, with the U.S. Dollar Index up about 0.2% on the day. Economists note the currency had rallied nearly 2% over the past month on U.S. dollar softness and strong Canadian data (a 3.4% annualized Q2 GDP print, a 75,000-job July gain), so Monday's move is being read as a partial unwind of that run-up rather than a fresh crisis signal — Canada's dollar remains one of the most heavily shorted major currencies, which some strategists say limits room for further downside.
🇺🇸 U.S. Markets
| Index | Close | Change |
| Dow Jones | 53,417.16 | +140.15 (+0.26%) |
| S&P 500 | 7,652.86 | -21.51 (-0.28%) |
| Nasdaq Composite | 25,980.19 | -200.26 (-0.76%) |
Wall Street split three ways Monday. Chip and AI-infrastructure names led the Nasdaq lower — Micron Technology dropped 5.8%, AMD and Broadcom fell more than 3% and 2% respectively, and the iShares Semiconductor ETF slid 2.7% — as investors turned cautious ahead of Nvidia's earnings report Wednesday, widely seen as the next big test for the AI trade. The Dow, less exposed to tech, managed a modest gain. Longer-dated Treasury yields eased slightly but stayed elevated, with the 30-year still hovering near multi-decade highs.
Tuesday's premarket is steadier: Dow futures were up about 0.4% and Nasdaq futures up roughly 0.7–0.8% as of early morning trading, with chip stocks attempting to stabilize. Investors are also weighing fresh U.S. sanctions on Iran and looking ahead to Fed Chair Kevin Warsh's first Jackson Hole speech on Friday.
🌍 Europe & Asia
| Index | Close | Change |
| FTSE 100 (London) | 10,856.31 | +0.35% |
| DAX (Germany) | 26,118.98 | -0.07% |
| CAC 40 (France) | 8,453.02 | -0.37% |
| Nikkei 225 (Japan, Tue) | ~65,713 | +0.28% |
| Hang Seng (Hong Kong, Tue) | ~25,939 | -0.28% |
European markets closed mixed Monday, with London's commodity- and bank-heavy FTSE 100 the outperformer while Frankfurt and Paris slipped modestly, weighed down by tech and auto names — Volkswagen fell more than 1.5% after CEO Oliver Blume warned of further cost-cutting, including potential job losses, as part of a coming restructuring push. Asian markets opened Tuesday on a cautious note after Monday's tech-led Wall Street selloff, with Japan's Nikkei edging higher, Hong Kong's Hang Seng slipping slightly, and South Korea's Kospi down more than 1%.
🛢️ Commodities
| Commodity | Price | Change |
| WTI Crude (Oct contract) | US$85.01/barrel | -US$2.05 |
| Gold (Dec contract) | US$4,697.80/oz | +US$17.20 (fresh record) |
Oil pulled back Monday as traders took profits after last week's sharp rally, with the move also reflecting some caution ahead of Treasury Secretary Scott Bessent's Iran sanctions announcement. Gold, meanwhile, kept climbing to a fresh all-time high above US$4,700 an ounce intraday, extending a run that's now stretched into a third straight weekly gain, as trade-war anxiety and safe-haven demand kept bullion in favour. Tuesday's early futures show oil easing further while gold holds roughly flat near its record.
💰 What It Means for You
A weaker loonie makes U.S. cross-border shopping, travel, and USD-denominated purchases (electronics, Amazon.com orders, U.S. vacations) more expensive right now — every cent the dollar drops adds a bit more to the bill. On the flip side, if you hold gold in a TFSA or RRSP, this record run has been a strong quarter. And if Trump's threatened 2027 auto tariff escalation holds, it's a signal worth watching if you or your household's income depends on the auto sector, particularly in Ontario — this is a threat for next year, not yet in effect, but it adds to an already uncertain trade picture heading into Canada's own September 8 retaliation date.
👀 What to Watch
- Today: BMO and Scotiabank report Q3 earnings; Bessent's Iran sanctions details continue to be digested by oil markets.
- Wednesday: National Bank earnings; Nvidia's Q2 report after the close — a key test for AI-stock sentiment.
- Thursday: CIBC, RBC and TD report earnings.
- Friday: Fed Chair Kevin Warsh's first Jackson Hole speech as chair — markets will parse it closely for rate-path signals.
- September 2: Bank of Canada rate decision (an 8th straight hold at 2.25% is still favoured, though less certain after the tariff escalation).
- September 7: Federal gas tax holiday expires.
- September 8: Canada's retaliatory tariffs on six sectors (steel, dairy, appliances, agricultural equipment, pulp and paper, electronics) are set to begin.
This article is for informational purposes only and does not constitute financial advice. Market data reflects the most recently confirmed session close and early Tuesday trading as of publication; figures may shift as trading continues.
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