Daily Markets Update: Oil Rattles TSX Ahead of BoC Hike Week | Oct 26
Canadian Money Brief • Daily Markets Update
Monday, October 26, 2026 • Covers Friday’s North American and European closes plus Monday’s Asian session
Oil took over from AI as the market’s main worry on Friday. Crude jumped above US$100 on fresh attacks on Saudi Arabia, the S&P/TSX Composite finished the week lower, and Wall Street logged a second straight weekly loss for the S&P 500. Monday brought a small reprieve: oil slipped after no weekend escalation in the Iran war, and most Asian and European markets steadied — just ahead of a week stacked with central bank decisions, including the Bank of Canada on Wednesday.
- TSX: 35,788.18, down 185.27 points (−0.52%) Friday; −1.07% on the week.
- Wall Street: Dow −1.2%, S&P 500 −0.5%, Nasdaq −0.2%.
- Oil: WTI settled at US$103.27; Brent at US$116.72.
- Loonie: 71.46¢ US, a five-week high.
- Bank of Canada: markets price roughly an 80% chance of a hike to 2.50% on Wednesday.
Canada: TSX Ends the Week in the Red
The S&P/TSX Composite Index lost 185.27 points on Friday to close at 35,788.18, leaving it down about 388 points, or roughly 1.1%, from the prior Friday’s close of 36,176.55. Energy stocks got a lift from crude above US$100, but that wasn’t enough to offset broader weakness as investors fretted over how much companies are spending on artificial intelligence.
Allan Small of iA Private Wealth told The Canadian Press the week’s pressure came from two directions: doubts about the return on AI spending and higher energy prices tied to the Middle East war. Among individual names, Methanex and BlackBerry were among the best performers on the index Friday.
There was good news on the economy. Statistics Canada reported August retail sales rose 1.2% to $74.6 billion, a resilient reading that analysts say supports the case for a Bank of Canada rate increase. The Canadian dollar closed at about 71.46 cents US (roughly C$1.40 per US$1), up from 71.32 cents Thursday, and touched its strongest level since September 16 intraday, extending a winning streak to seven straight sessions.
Canada Scoreboard
| Market | Level | Change |
|---|---|---|
| S&P/TSX Composite Friday, Oct 23 close | 35,788.18 | ▼ -0.52% |
| Canadian dollar (CAD/USD) vs. 71.32¢ Thursday | 71.46¢ | ▲ +0.2% |
Sources: The Canadian Press / BNN Bloomberg, Reuters, Investing.com. CAD change is approximate.
United States: Oil and AI Doubts Drag Wall Street Lower
U.S. stocks closed broadly lower Friday as oil climbed to its highest level in months. Nearly three in four stocks in the S&P 500 fell. The Dow dropped 652.82 points (1.2%) to 52,215.16, the S&P 500 slid 39.75 points (0.5%) to 7,623.68, and the Nasdaq slipped 53.52 points (0.2%) to 25,955.34. The S&P 500 and the Nasdaq both finished the week lower, and the S&P posted its second consecutive weekly decline.
Energy was the bright spot: Chevron gained 2.9% and ConocoPhillips rose 3.6%. A handful of AI-linked names also bounced, including Micron (+2.5%), Intel (+1.7%), AMD (+1.7%) and Microsoft (+0.7%). Industrials and financials were the weak spots — Caterpillar fell 2.4%, American Express dropped 3.7% after announcing its first major job cuts in about a decade, and JPMorgan and Citigroup each lost 1.5%.
In the bond market, the 10-year Treasury yield edged up to 4.99% from 4.96% on Thursday. U.S. inflation remains stubbornly above 3%, and traders expect the Federal Reserve to hold rates this Wednesday but lean heavily toward another hike in December.
U.S. Scoreboard
| Market | Level | Change |
|---|---|---|
| Dow Jones Industrial Average Friday, Oct 23 close | 52,215.16 | ▼ -1.23% |
| S&P 500 | 7,623.68 | ▼ -0.52% |
| Nasdaq Composite | 25,955.34 | ▼ -0.21% |
| U.S. 10-year Treasury yield up from 4.96% | 4.99% | ▲ +0.03 pt |
Source: The Associated Press / BNN Bloomberg. Index levels are Friday closes.
Europe: France Rattles the Continent
European shares ended Friday lower, capping a week in which riots in France, jitters over how the AI boom will be financed and surging oil prices sent investors looking for shelter. The pan-European STOXX 600 fell 0.3% to 635.77 and posted a weekly loss of more than 1%. Germany’s DAX lost 0.86%, France’s CAC 40 fell 0.36% and London’s FTSE 100 slipped 0.32% after a slump in consumer confidence.
France was the focus. A market wrap reported that the gap between French and German 10-year bond yields widened to about 170 basis points, the widest since 2011, while luxury group Kering plunged 16.6%. France’s composite PMI also fell to 48.4 in October from 51.1, its lowest in four months, according to preliminary data. Early Monday, European indexes opened modestly higher as oil eased.
Europe Scoreboard
| Market | Level | Change |
|---|---|---|
| STOXX Europe 600 Friday, Oct 23 close | 635.77 | ▼ -0.31% |
| Germany DAX | 25,152.31 | ▼ -0.86% |
| France CAC 40 | 7,782.83 | ▼ -0.36% |
| U.K. FTSE 100 | 10,690.36 | ▼ -0.32% |
Sources: Investing.com, market close wraps.
Asia-Pacific: Chip Stocks Weigh on Seoul and Tokyo
Asian markets were mostly lower in Monday trading as the AI-spending worry spread to chipmakers. South Korea’s Kospi fell 1.5% to 5,469.47, and Japan’s Nikkei 225 slipped 0.8% to 62,189.65. Hong Kong’s Hang Seng gained 0.5% to 23,211.81, the Shanghai Composite rose 0.2% to 3,697.52 and Australia’s S&P/ASX 200 added 0.2% to 8,809.90. Goldman Sachs cut its 12-month Kospi target to 9,000 from 12,000, even as it said the index still has more than 60% upside after a slide of over 35% from its June peak.
Asia-Pacific Scoreboard (Monday, Oct 26)
| Market | Level | Change |
|---|---|---|
| Japan Nikkei 225 | 62,189.65 | ▼ -0.8% |
| South Korea Kospi | 5,469.47 | ▼ -1.5% |
| Hong Kong Hang Seng | 23,211.81 | ▲ +0.5% |
| Shanghai Composite | 3,697.52 | ▲ +0.2% |
| Australia S&P/ASX 200 | 8,809.90 | ▲ +0.2% |
Source: The Associated Press. Asian markets have already closed for Monday.
Oil and Gold: Crude Cools From Its Highs
West Texas Intermediate (December) settled Friday up US$3.80 at US$103.27 a barrel, and Brent crude rose 3.1% to settle at US$116.72, up from below US$97 at the start of October. The rally has been driven by the U.S.-Iran war, which has severely cut global supply, and by fresh attacks on Saudi Arabia. On Monday, crude eased roughly 2% in Asian trading — WTI near US$101 and Brent in the US$114–115 range — after the weekend passed without a U.S. escalation and with reports of diplomatic efforts in the region.
Gold has not benefited from the geopolitical stress. The December contract fell US$52.50 on Friday to US$4,007.90 an ounce, near a three-month low, as higher energy prices stoke inflation and rate-hike expectations. Futures edged higher in early Monday trading.
Commodities & Currency
| Market | Level | Change |
|---|---|---|
| WTI crude (Dec) Friday settle | US$103.27 | ▲ +3.8% |
| Brent crude Friday settle | US$116.72 | ▲ +3.1% |
| Gold (Dec) Friday settle | US$4,007.90 | ▼ -1.3% |
| CAD/USD Friday close | 71.46¢ | ▲ +0.2% |
Sources: The Canadian Press, The Associated Press. Monday morning oil quotes are intraday and will have moved by the time you read this.
Rate hike week is here. Markets price roughly an 80% chance the Bank of Canada lifts its key rate from 2.25% to 2.50% on Wednesday. If it does, expect variable-rate mortgages, HELOCs and lines of credit to follow within days — roughly $21 more in monthly interest for every $100,000 borrowed at a variable rate.
Savers get a small win. Two-year Canadian government bond yields have risen more than 22 basis points since the central bank’s September meeting, which usually pulls GIC and high-interest savings rates higher too.
Oil is the swing factor. The same energy spike that is lifting TSX energy stocks is also what has the central bank worried about inflation spreading — so it will show up at the pump and in grocery bills before it helps your portfolio. Check your TFSA/RRSP for energy exposure before assuming you are protected.
What to Watch This Week
| When | Event | Expectation |
|---|---|---|
| Wed, Oct 28 | Bank of Canada decision + Monetary Policy Report (9:45 a.m. ET) | 25-bp hike to 2.50% priced at roughly 80%; 19 of 34 economists polled by Reuters expect one |
| Wed, Oct 28 | U.S. Federal Reserve decision | Hold expected; markets lean toward a December hike |
| Wed, Oct 28 | Alphabet and Microsoft earnings (after the close) | AI spending and cloud growth under the microscope |
| Thu, Oct 29 | U.S. Q3 GDP (first estimate) and PCE inflation | Headline PCE expected near 3.6–3.7% year over year |
| Thu, Oct 29 | European Central Bank decision; Amazon and Intel earnings | ECB expected to hold; another hike seen in December |
| Fri, Oct 30 | Bank of Japan decision | Hold at 1.25% expected |
Market levels reflect Friday, October 23 closes in North America and Europe, and Monday, October 26 closes in Asia-Pacific; oil, gold and futures commentary for Monday is intraday. Figures were cross-checked across The Canadian Press/BNN Bloomberg, The Associated Press, Reuters and Investing.com. This article is for information only and is not investment, tax or financial advice. Past market moves do not predict future results.
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