Week of September 22–26, 2026
It was a week of two forces tugging in opposite directions. Bond yields surged to levels not seen since 2004–2007, driven by resilient US economic data, hawkish Fed signals, and oil-driven inflation fears — putting pressure on equities and the Canadian dollar. Then, late in the week, reports emerged that US and Iranian negotiators were exploring a phased deal to reopen the Strait of Hormuz. Oil pulled back sharply Friday, yields stabilized, and markets found enough relief to post a partial recovery. The TSX finished the week slightly lower but well off its worst levels, while US indices managed a weekly gain.
🍁 Canada — TSX & the Loonie
The S&P/TSX Composite entered the week near 35,800 and, after a volatile ride, closed Friday around the same level — giving up roughly 0.3% on the week. Mid-week selling was driven by the same forces pressuring global markets: surging US Treasury yields, a rising oil-inflation premium, and investor nervousness ahead of the Oct. 28 Bank of Canada decision. Canada's 10-year yield reached a three-year high, squeezing rate-sensitive sectors. On the positive side, technology stocks posted a roughly 9% weekly gain, and financials recovered Friday as yields stabilized.
| Index / Asset | Friday Close (approx.) | Week |
|---|
| S&P/TSX Composite | ~35,801 | −0.3% |
| Canadian Dollar (USD/CAD) | ~1.4150 (~70.7¢ US) | −0.5% (loonie weaker) |
| Canada 10-Yr Yield | ~3.94% (3-yr high) | ↑ sharply |
The loonie continued to lose ground, trading near 1.4150 USD/CAD by Friday — its weakest level since mid-July — down in 12 of the 13 sessions since Canada's counter-tariffs took effect on September 8. The widening rate gap between the Fed (3.75–4.00%) and the Bank of Canada (2.25%) is the primary driver. Markets are pricing roughly a 65% chance of a BoC hike at the October 28 meeting, though that probability has been moving around on each new data point.
On Monday, BoC Governor Tiff Macklem gave a speech highlighting that US trade policy unpredictability could set back Canada's economic progress — framing the central bank's challenge as a genuine two-sided dilemma: hiking to fight oil-driven inflation versus staying put to avoid choking off tariff-battered growth.
🇺🇸 United States
US indices closed the week higher — a notable achievement given the surge in Treasury yields to multi-decade highs (10-year near 5.10% on Thursday) and persistent inflation concerns. The Friday relief rally, powered by easing oil prices and Hormuz deal optimism, was enough to snap the Dow's three-week losing streak and give both the S&P 500 and Nasdaq weekly wins. Akamai Technologies rallied more than 14% Friday after announcing a multiyear deal with Anthropic.
| Index | Friday Close | Week |
|---|
| Dow Jones Industrial Average | 51,828.62 | +0.93% Fri; Dow snapped 3-wk losing streak |
| S&P 500 | 7,743.41 | +0.51% Fri; ~+0.6% week |
| Nasdaq Composite | 27,068.72 | +0.48% Fri; Nasdaq 100 ~+2.1% week |
| US 10-Yr Treasury Yield | ~5.17% (Fri relief) | Peaked ~5.10% Thu — highest since 2007 |
| VIX | ~14.87 | Fell 5% Friday — easing near-term fear |
The week's main story in the US was the continued bond selloff. Strong US PMI data mid-week pushed yields higher, with the New York Fed's Williams and Philadelphia Fed's Paulson both signalling further rate hikes are on the table. The 30-year yield briefly touched 5.43% — its highest since 2004. Higher borrowing costs filtered directly into mortgage rates and consumer credit conditions, making this a week with real wallet impact for Canadians holding US-rate-linked products.
🇪🇺 Europe
European markets had a difficult week as surging sovereign yields — Eurozone bonds hit multi-decade highs alongside US Treasuries — weighed on financials and auto stocks. The ECB's September hike to 2.50% (its second this cycle) is still working through the system, and flash September PMI data showed stronger-than-expected services activity, which traders interpreted as keeping the door open to further ECB tightening. The week opened with Monday's DAX near 25,578 and FTSE near 10,708; by Thursday, both had slipped further on yield anxiety before a partial Friday recovery.
| Index | Mon Open (approx.) | Thu Close | Week |
|---|
| FTSE 100 (UK) | ~10,708 | ~10,679 | Modest loss — yield pressure |
| DAX (Germany) | ~25,578 | ~25,266 | Financial & auto drag |
| CAC 40 (France) | ~8,154 | ~8,081 | Financials and industrials weak |
| Euro STOXX 50 | — | ~6,301 | −0.4% Thursday |
Allianz and Deutsche Bank fell sharply mid-week on rate anxiety, and German auto manufacturers (Mercedes-Benz, BMW) each dropped around 3% as higher borrowing costs clouded the demand outlook. On the positive side, European semiconductor stocks — ASML, Infineon — have continued to hold gains of 60%+ year-to-date, fuelled by AI-driven demand. Friday's partial recovery came alongside easing oil prices and the same Hormuz diplomacy that lifted North American and Asian markets.
🌏 Asia-Pacific
| Index | Friday Close | Week |
|---|
| Nikkei 225 (Japan) | 66,364.20 | +1.30% Fri; +3.82% on week — five-session win streak |
| Hang Seng (Hong Kong) | 24,510.09 | −1.01% Fri; held relatively steady vs. Mon's 25,087 |
| Shanghai Composite (China) | ~3,888 | Modest weekly loss |
Japan was the week's standout winner in Asia. The Nikkei extended its winning streak to five sessions as oil prices retreated Friday, helping relieve some pressure on the energy-import-heavy Japanese economy. Financial stocks led gains — Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho Financial each rose 3–4% Friday alone. Japan's 10-year bond yield did hit its highest level since 1996 during the week, adding complexity to the BoJ's policy path. US-China trade discussions in Washington — Presidents Trump and Xi held bilateral talks — kept markets cautious on the direction of global trade, though Trump described the meeting as "great."
🛢️ Oil, Gold & Commodities
| Commodity | Friday Close (approx.) | Week |
|---|
| Brent Crude | ~$104–106/bbl | +2%+ week; eased sharply Fri on Iran deal talk |
| WTI Crude | ~$92.41/bbl | −2.3% Fri; ~−$3/bbl week — Brent/WTI spread widest since May at ~$12 |
| Gold (Spot USD/oz) | ~$4,285–4,298 | 3rd straight weekly loss — rising yields & strong USD weigh |
| Gold (CAD/oz) | ~C$6,060 | Weaker loonie partially offsets USD gold decline |
Oil dominated headlines all week. Houthi attacks on Saudi energy infrastructure continued, Iranian diplomats proposed reopening the Strait of Hormuz within seven days contingent on major US concessions, and US-Iran negotiators were reported to be exploring a phased arrangement. Brent topped $108 intraday on Thursday before pulling back sharply Friday on those diplomacy reports, settling near $104–106. WTI fell more than 2% Friday, with the unusually wide Brent-WTI spread reflecting a potential US ban on diesel exports adding downward pressure on domestic crude prices.
Gold had its third straight week of losses — a notable reversal after a historic run to $4,700+ earlier in the summer. The combination of multi-decade high bond yields (real rates rising) and a strong US dollar is squeezing the precious metal. For Canadians holding gold in their TFSA or RRSP, the weaker loonie softens the blow but doesn't eliminate it.
💡 What It Means for Your Wallet- Mortgages & HELOCs:Canada's 5-year bond yield is near 3.41% — the key driver of fixed mortgage rates. With US 10-year Treasuries pushing 5%+, Canadian fixed rates have limited room to fall. The BoC's Oct. 28 decision is now live. If the BoC hikes to 2.50%, variable-rate holders on a $400K mortgage could see payments rise ~$200–$240/month.
- Gas prices:Relief could come if the Hormuz deal firms up — but the CAA national average was still near 178–180¢/L this week. The gas tax holiday extension (to Jan. 31, 2027) is the only thing keeping the pump pain from being worse.
- Canadian dollar:The loonie near 70.7¢ US makes US travel, US-currency online shopping, and cross-border purchases meaningfully more expensive. Plan accordingly.
- Gold & savings:If you hold gold as a hedge in your TFSA or RRSP, three straight weekly losses may look alarming, but gold is still up dramatically from its 2025 lows. The primary pressure is rising real yields — not fundamental weakness.
📅 What to Watch — Week of Sept. 29, 2026
Mon, Sept. 29
US alcohol & motorcycle import bans take effect — The US bans on Canadian beer, wine, cider, spirits, and motorcycles over 800cc come into force today. Watch for updates on Ontario's LCBO response and industry reaction. Directly affects Canadian distillers, brewers, and the ~$1.4B alcohol export sector.
Wed, Sept. 30
TSX closed — National Day of Truth and Reconciliation Canadian markets shut. US markets open normally.
Oct. 28
Bank of Canada rate decision — The most closely watched Canadian monetary policy event in years. National Bank and Scotiabank are forecasting a hike to 2.50%; TD, BMO, and RBC see a hold. Markets currently pricing ~65% odds of a hike. Direct impact on variable-rate mortgages and HELOCs.
Oct. 28
US Federal Reserve rate decision — Also on Oct. 28, the Fed decides. Currently at 3.75–4.00%. The two-central-bank same-day decision makes the rate gap dynamic extremely live. Fed hike = more loonie pressure; Fed hold = some CAD relief.
Ongoing
US-Iran Strait of Hormuz talks — Iran has proposed a conditional reopening within seven days. Any breakthrough would send oil materially lower; a collapse would spike prices again. Watch closely — it drives gas prices, inflation prints, and central bank decisions globally.
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