June in review
June was a mixed month for financial markets as investors balanced renewed geopolitical tensions, rising inflation and uncertainty around the path for interest rates. Canadian equities rose 0.5%, led by gains in Financials (+8.8%), Consumer Staples (+8.0%) and Health Care (+6.0%). U.S. equities moved lower, declining 0.9% as Communication Services (-7.8%), Energy (-5.1%) and Information Technology (-3.3%) weighed on returns. Canadian bonds were up 0.5%, while U.S. bonds gained 0.2% as investors continued to assess the outlook for inflation and central bank policy. Commodity prices also pulled back, with oil falling 18.5% as U.S. and Iran work toward a peace deal, gold declining 12.1% and natural gas slipping 1.3%. Emerging market equities fell 1.4%, retracing some gains after two consecutive months of outperformance.
Here are some of June's most notable events:
Conflict in the Middle East continued to drive energy market volatility. June got off to a turbulent start after Iran suspended negotiations with the U.S. on June 1 over military operations in Lebanon, pushing oil prices higher and renewing concerns over potential disruptions to energy supplies. However, diplomatic progress mid-month culminated in the signing of an interim memorandum of understanding, which called for an immediate ceasefire, initiated the reopening of the Strait of Hormuz, and outlined a 60-day framework toward reaching a final peace deal. Oil prices have come down since and negotiations are ongoing.
Inflation pressures return following stronger energy and producer prices. In Canada, producer prices—the prices businesses receive for goods such as fuel, fertilizer and other industrial products—rose 1.2% month over month in May, marking the fifth consecutive monthly increase. Some of these higher prices also flowed through to consumers, with the Consumer Price Index (CPI) rising 3.2% year over year, up from 2.8% in April and its highest level since December 2023. Gasoline remained a key driver. In the U.S., inflation pressures also strengthened, with consumer prices rising 4.2% year over year, their highest reading since April 2023 and the third consecutive monthly acceleration.
| Index† | Change (%) | Index Level | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| Treasury Bill (FTSE Canada 60 Day T-Bill) | 0.20 | 1.10 | 2.43 | 192.98 |
| Canadian Bonds (FTSE Canada Universe Bond) | 0.51 | 2.24 | 3.46 | 1,226.72 |
| Canadian Equities (S&P/TSX Composite) | 0.50 | 11.20 | 32.93 | 34,856.99 |
| U.S. Bonds (Bloomberg U.S. Aggregate Bond, US$) | 0.24 | 0.62 | 3.79 | 2,363.38 |
| U.S. Equities (S&P 500, US$) | -0.95 | 10.19 | 22.29 | 7,499.36 |
| Global Equities (MSCI World, US$) | -0.69 | 9.96 | 21.85 | 4,825.50 |
| Emerging Markets (MSCI Emerging Markets, US$) | -1.37 | 24.00 | 44.15 | 1,722.89 |
| Currencies† | Change (%) | Exchange Rate | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| C$/US ($) | -2.84 | -3.32 | -4.15 | 0.7044 |
| C$/Euro (€) | -0.80 | -0.60 | -1.07 | 0.6167 |
| C$/Pound (£) | -1.39 | -1.78 | -0.73 | 0.5312 |
| C$/Yen (¥) | -0.82 | 0.22 | 8.18 | 114.507 |
| Commodities (US$)† | Change (%) | Price | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| Gold Spot ($/oz) | -12.07 | -9.05 | 16.74 | 4,038.50 |
| Oil WTI ($/barrel) | -18.52 | 21.84 | 13.34 | 69.50 |
| Natural Gas ($/MMBtu) | -1.30 | -12.46 | -22.25 | 3.28 |
†Total Return, as at June 30, 2026. Indices are quoted in their local currency.
Source: Bloomberg
Indices are not managed, and it is not possible to invest directly in an index.
Strong labour markets complicate interest rate expectations. Canada’s labour market demonstrated renewed resilience in May, with employment increasing by 87,800 jobs and reversing losses recorded the previous month. It marked the largest monthly gain since December 2024, while the unemployment rate declined to 6.6% from 6.9% in April. Employment gains were supported by strength in hospitality, which also contributed to job growth in the United States. U.S. payrolls rose by 172,000 jobs in May, well above economist expectations, while the unemployment rate held at 4.3% and average hourly earnings increased 0.3% over the month. Stronger-than-expected labour market data may reduce the urgency for central banks to ease policy, reinforcing uncertainty around the timing and pace of potential interest rate cuts.
Did you know?
Global equities had their strongest quarterly gain since 2020, supported by steady economic growth and improving investor confidence despite ongoing geopolitical risks. In Canada, Financials led the S&P/TSX higher (8.8%), with their large weight in the index helping drive overall gains. This strength reflects improving lending conditions, stronger earnings expectations, and growing interest in how new technologies like AI could support the sector.
Insights from our Portfolio Managers
Initial Public Offerings (IPOs) often capture investor attention because they offer a first opportunity to invest in companies entering the public markets, many of which are tied to powerful themes such as artificial intelligence, digital infrastructure, defence, space, energy transition or other areas of innovation. But an IPO is not automatically a better opportunity simply because it is new. In many cases, public investors are being asked to assess businesses with limited trading history, evolving profitability, high expectations and valuations that already reflect significant future growth.
That is why we look at IPOs through a portfolio-construction lens, not as stand-alone events to chase. A new listing may provide attractive exposure to an emerging company or long-term theme, but it still needs to earn its place in a portfolio based on fundamentals, valuation, risk, diversification benefits and how it contributes to the investor’s overall objective. For long-term investors, the more important question is not whether an IPO performs well on day one, but whether the business can compound value over time and whether the exposure improves the portfolio’s risk-return profile. Within a multi-asset approach, IPOs and newly public companies can be part of the opportunity set, but they are best considered alongside broader exposures, established public companies, active strategies, ETFs, alternatives and other building blocks that collectively support long-term outcomes.
— Craig Maddock, VP & Senior Portfolio Manager, Head of Multi-Asset Management
