Monthly highlights of major events which drive financial markets, along with perspectives on what they mean and why they matter.
June in review
In June, equity markets posted solid gains across regions, with the S&P/TSX Composite up 2.91% and the S&P 500 advancing 5.08% in USD terms. In Canada, the top-performing sectors were Health Care (+9.4%) and Information Technology (+4.9%) while leading U.S. sectors included Information Technology (+9.8%), Communication Services (+7.3%), and Energy (+4.8%). Canadian bond markets posted modest gains, with the FTSE Canada Universe Bond Index rising 0.1% after swinging widely during the month—declining early following the Bank of Canada’s decision to hold rates steady, then recovering and climbing as geopolitical tensions calmed, and easing again amid renewed Canada–U.S. trade tensions. U.S. bonds fared better, with the Bloomberg U.S. Aggregate Bond Index gaining 1.54% as softer inflation readings boosted expectations for rate cuts. Emerging markets outperformed, with the MSCI Emerging Markets Index gaining 6.12% in USD terms amid improved sentiment tied to a tentative U.S.–China trade agreement.
Here are some of June's most notable events:
Canada–U.S. trade tensions add uncertainty to economic outlook. Trade relations faced renewed challenges late in the month as President Trump abruptly paused trade negotiations with Canada in response to the imminent remittance of a 3% digital services tax—enacted in June 2024 and retroactive to 2022—targeting large U.S.-based technology firms. He described the measure as a “direct and blatant attack” on American interests, prompting immediate concerns over potential retaliatory tariffs. The dispute unfolded against the backdrop of a $7.1 billion trade deficit reported by Canada in April—the largest in the country’s history—highlighting the strain on cross-border trade and weakening export demand. In a bid to de-escalate the situation and reopen talks, Canada formally rescinded the tax days later, setting the stage for continued negotiations.
Middle East flare-up. On June 13, Israel launched a military strike on Iran, targeting nuclear infrastructure and senior military leadership. The attack escalated regional tensions that had been building for months, raising fears of a broader Middle East conflict as Iran responded with missile strikes on Israeli cities. On June 22, the United States entered the conflict with its own strike on Iranian nuclear facilities that was followed by immediate retaliation from Iran, who launched missiles at U.S. bases in Qatar. Global markets reacted with oil prices rising and ending the month up 8.9% as investors priced in potential supply disruptions. By June 24, a ceasefire between Iran and Israel took effect, easing tensions.
| Index† | Change (%) | Index Level | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| Treasury Bill (FTSE Canada 60 Day T-Bill) | 0.22 | 1.45 | 3.69 | 188.41 |
| Canadian Bonds (FTSE Canada Universe Bond) | 0.06 | 1.44 | 6.13 | 1,185.73 |
| Canadian Equities (S&P/TSX Composite) | 2.91 | 10.18 | 26.39 | 26,857.12 |
| U.S. Bonds (Bloomberg U.S. Aggregated Bond, US$) | 1.54 | 4.02 | 6.08 | 2,277.06 |
| U.S. Equities (S&P 500, US$) | 5.08 | 6.20 | 15.14 | 6,204.95 |
| Global Equities (MSCI World, US$) | 4.35 | 9.75 | 16.79 | 4,026.44 |
| Emerging Marketings (MSCI Emerging Markets, US$) | 6.12 | 15.52 | 15.89 | 1,222.78 |
| Currencies† | Change (%) | Exchange Rate | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| C$/US ($) | 0.96 | 5.71 | 0.53 | 0.7349 |
| C$/Euro (€) | -2.82 | -7.16 | -8.65 | 0.6234 |
| C$/Pound (£) | -1.09 | -3.69 | -7.45 | 0.5351 |
| C$/Yen (¥) | 0.86 | -3.20 | -9.94 | 105.846 |
| Commodities (US$)† | Change (%) | Price | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| Gold Spot ($/oz) | -0.23 | 21.75 | 34.09 | 3,307.70 |
| Oil WTI ($/barrel) | 8.90 | -6.30 | -12.46 | 65.11 |
| Natural Gas ($/MMBtu) | -1.90 | -2.92 | 0.03 | 3.46 |
†Total Return, as at June 30, 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.
Canadian labour market softens amid trade headwinds. Canada’s labour market showed further signs of strain in May, as rising trade tensions and economic uncertainty weighed on hiring and payrolls. The national unemployment rate edged up by 0.1% to 7.0%, the highest level—excluding the pandemic period—since 2016. This marks the third consecutive monthly increase, with the unemployment rate rising a combined 0.4% since February. The data suggests a gradual cooling in employment momentum, with businesses showing increased caution around hiring and expansion. Analysts point to elevated tariffs, tighter financial conditions, and softer domestic demand as key contributors to the slowdown.
Did you know?
The G7, or Group of Seven, is a forum where leaders from seven of the world’s most advanced economies meet to discuss global issues. It includes Canada, the United States, the United Kingdom, France, Germany, Italy, and Japan. While the G7 doesn’t create laws, its members represent nearly half of the world’s economic output, so the ideas and agreements discussed can shape future policies and market direction. In June, the 2025 G7 summit took place in Kananaskis, Alberta, marking the second time the location has hosted the summit, the first being in 2002. Topics included trade cooperation, energy security, and digital taxation, all of which are important to investors because they can influence economic growth and business conditions worldwide.
