Monthly highlights of major events which drive financial markets, along with perspectives on what they mean and why they matter.
July in review
Equity markets advanced in July, supported by improving investor sentiment driven by a resilient quarterly earnings season and strong U.S. GDP growth. Canada’s S&P/TSX Composite index rose 1.7%, with Communication Services (5.0%), Information Technology (4.5%), and Energy (2.6%) leading sector gains. In the U.S., the S&P 500 climbed 2.2% in U.S. dollar terms, lifted by strength in Information Technology (5.2%), Utilities (4.9%), and Industrials (3.0%) sectors. Fixed income markets declined as rising bond yields pressured prices. Canadian bonds fell 0.7%, while U.S. bonds slipped 0.3%. In commodities, WTI crude oil surged 8.5%, while natural gas dropped 11.0%, extending its year-to-date decline to over 12%. Emerging market equities posted solid gains, with the MSCI Emerging Markets Index up 2.0%, primarily due to improving economic data.
Here are some of July's most notable events:
Making global trade great again, one deal at a time. It was a busy month for global trade as the U.S. finalized two major agreements that could reshape transatlantic and Indo-Pacific economic relations. On July 22, the U.S. and Japan reached a joint trade deal. Japan will invest $550 billion into the U.S. to rebuild and expand core American industries, with the U.S. also securing increased market access for American producers in sectors such as energy, manufacturing, and agriculture. Following this announcement, on July 27, the U.S. and European Union (EU) signed a comprehensive trade and energy agreement under which the EU will invest $600 billion into the U.S. over the course of President Trump’s term. Additionally, the EU committed to purchasing $750 billion worth of U.S. energy exports through 2028.
Central banks keep calm and carry on. Inflation in Canada and the U.S. rose modestly in July, with Canada’s rate increasing 0.1 % and U.S. rate climbing 0.3%. In Canada, higher prices for durable goods like vehicles and furniture were a primary contributor to the monthly increase. In the U.S., price increases were more broad-based across goods and services. Despite this, both the Bank of Canada and the Federal Reserve held their policy interest rates steady in July, citing ongoing economic resilience while noting the uncertainty remains.
Index† | Change (%) | Index Level | ||
---|---|---|---|---|
1 Mth | YTD | 1 Yr | ||
Treasury Bill (FTSE Canada 60 Day T-Bill) | 0.22 | 1.67 | 3.46 | 188.83 |
Canadian Bonds (FTSE Canada Universe Bond) | -0.74 | 0.69 | 2.90 | 1,176.95 |
Canadian Equities (S&P/TSX Composite) | 1.69 | 12.04 | 21.39 | 27,259.78 |
U.S. Bonds (Bloomberg U.S. Aggregated Bond, US$) | -0.26 | 3.75 | 3.38 | 2,271.05 |
U.S. Equities (S&P 500, US$) | 2.24 | 8.58 | 16.31 | 6,339.39 |
Global Equities (MSCI World, US$) | 1.31 | 11.19 | 16.24 | 4,076.04 |
Emerging Markets (MSCI Emerging Markets, US$) | 2.01 | 17.86 | 17.82 | 1,243.23 |
Currencies† | Change (%) | Exchange Rate | ||
---|---|---|---|---|
1 Mth | YTD | 1 Yr | ||
C$/US ($) | -1.80 | 3.81 | -0.35 | 0.7217 |
C$/Euro (€) | 1.43 | -5.84 | -5.49 | 0.6323 |
C$/Pound (£) | 2.15 | -1.62 | -2.96 | 0.5466 |
C$/Yen (¥) | 2.80 | -0.48 | 0.18 | 108.813 |
Commodities (US$)† | Change (%) | Price | ||
---|---|---|---|---|
1 Mth | YTD | 1 Yr | ||
Gold Spot ($/oz) | -0.43 | 21.02 | 29.33 | 3,348.60 |
Oil WTI ($/barrel) | 8.47 | 0.16 | -3.73 | 69.26 |
Natural Gas ($/MMBtu) | -11.00 | -12.31 | -2.23 | 3.11 |
†Total Return, as at July 31, 2025. Indices are quoted in their local currency.
Source: Bloomberg
Indices are not managed, and it is not possible to invest directly in an index.
U.S. fiscal bill passes, boosting growth outlook and deficit concerns. Markets closely watched as the “Big Beautiful Bill”—a sweeping fiscal package—was signed into law on July 4. The bill includes significant new spending on infrastructure, clean energy, border security, and defense, along with broad tax relief for middle- and working-class Americans. The legislation also features new social programs and additional funding for military modernization and missile defense. While analysts noted the bill’s potential to boost near-term GDP growth and support key sectors, concerns over the long-term fiscal impact led to upward pressure on U.S. Treasury yields and renewed debate over the country’s debt trajectory.
Did you know?
Copper is often referred to as “the metal with a Ph.D. in economics” or simply “doctor copper” in finance because of its uncanny ability to signal turning points in the global economy. As a key input in everything from power grids and smartphones to electric vehicles and construction, copper demand tends to rise and fall in sync with economic activity—making its price a closely watched economic indicator. In July, copper gained renewed attention after President Trump announced a universal 50% tariff on imports of select copper products. The move raised concerns about increased input costs for manufacturers and potential challenges for global infrastructure development and the energy transition.