September in review
September saw broad weakness across equity and fixed income markets as investors navigated a challenging macroeconomic backdrop. Rising bond yields, persistent inflation concerns and uncertainty surrounding trade policy weighed on investor sentiment throughout the month. Ongoing geopolitical friction between the U.S. and Iran kept global energy supplies in focus, contributing to volatility across commodity markets. While most equity sectors moved lower, technology-related companies showed relative resilience amid continued optimism surrounding artificial intelligence investment and corporate earnings. Commodity returns were mixed, with WTI crude oil gaining amid ongoing supply concerns, while gold declined despite heightened market uncertainty and natural gas moved lower.
Here are some of September’s most notable events:
U.S.-Iran negotiations resume. Optimism rose late in the month after reports emerged that both sides were discussing a phased agreement to reopen the Strait of Hormuz, including the removal of the U.S. naval blockade. However, the proposed framework resembles a similar agreement reached in June that ultimately collapsed, highlighting the challenges of reaching a lasting resolution. The conflict's impact has extended beyond energy markets, contributing to the broader rise in driving up global bond yields to multi-year highs.
Rising yields signal a new era for investors. Global bond yields moved higher in September as investors weighed the impact of persistent inflation, elevated government borrowing and continued geopolitical tensions. In September, central bank paths diverged: the Bank of Canada left its policy rate unchanged at 2.25%, noting that uncertainty surrounding trade disputes and geopolitical developments continued to cloud the outlook. Whereas later in the month, both the U.S. Federal Reserve (the Fed) and European Central Bank raised interest rates by 0.25%, reinforcing expectations that borrowing costs may remain elevated for longer. Importantly, for the Fed, this marked its first return to policy tightening since 2023.
| Index† | Change (%) | Index Level | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| Treasury Bill | 0.17 | 1.67 | 2.29 | 194.06 |
| Canadian Bonds | -1.22 | -0.78 | -1.10 | 1,190.38 |
| Canadian Equities | -2.62 | 13.00 | 20.07 | 35,235.87 |
| U.S. Bonds | -2.61 | -2.91 | -1.84 | 2,280.45 |
| U.S. Equities | -0.35 | 12.73 | 15.72 | 7,651.54 |
| Global Equities | -1.15 | 12.12 | 15.71 | 4,902.65 |
| Emerging Markets | -0.65 | 23.52 | 29.44 | 1,704.87 |
| Currencies† | Change (%) | Exchange Rate | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| C$/US ($) | -2.65 | -3.55 | -2.19 | 0.7027 |
| C$/Euro (€) | -0.19 | -0.05 | 1.27 | 0.6201 |
| C$/Pound (£) | -0.56 | -2.05 | -0.88 | 0.5297 |
| C$/Yen (¥) | -4.07 | -3.19 | 4.11 | 110.615 |
| Commodities (US$)† | Change (%) | Price | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| Gold Spot ($/oz) | -11.40 | 5.51 | 21.55 | 361.15 |
| Oil WTI ($/barrel) | 7.57 | 58.85 | 48.21 | 90.42 |
| Natural Gas ($/MMBtu) | -1.24 | -24.20 | -26.71 | 3.03 |
Source: Bloomberg. Treasury Bill is represented by the FTSE Canada 60 Day T-Bill Index (C$), Canadian Bonds represented by the FTSE Canada Universe Bond Index (C$), Canadian Equities represented by the S&P/TSX Composite TR Index (C$), U.S. Equities represented by the S&P 500 TR Index (US$), International Equities represented by the MSCI EAFE GR Index (US$), Emerging Market Equities represented by the MSCI EM GR Index (US$), European Equities represented by the MSCI Europe Index (€). Indices are not managed, and it is not possible to invest directly in an index. Assumes reinvestment of all income and no transaction costs or taxes.
† Total Return, as at September 30, 2026.
Trade discussions highlight the importance of diversification. Canada imposed reciprocal tariffs on selected U.S. imports on September 8, while later that day President Trump signed executive orders banning certain Canadian imports and introducing new tariffs on selected products, with additional U.S. import restrictions scheduled to take effect on September 29. The longstanding economic ties between the two countries remained an important foundation for trade and investment. At the same time, Canada continued to explore opportunities to diversify its international partnerships and reduce reliance on any single market. As policymakers and businesses navigate an evolving trade landscape, efforts to broaden trade relationships and strengthen global economic connections have taken on increased importance, helping support a more diversified and adaptable economy.
Did you know?
Canada announced it is exploring the possibility of an associate membership arrangement with the European Union, a concept that would represent a significant evolution in Canada-EU relations. While supporters argue deeper integration could strengthen trade, investment and policy cooperation, the proposal remains unprecedented and its long-term implications are not yet fully understood. Questions remain regarding governance, regulatory alignment, national sovereignty and the obligations that could accompany any formal arrangement. As discussions evolve, the initiative is expected to generate debate over both the opportunities and trade-offs associated with closer economic and political ties to Europe.
Insights from our Portfolio Managers
Trade tensions between Canada and the U.S. have increased, but the broader economic and equity market impact has remained relatively contained. Over the longer term, markets have shown resilience despite the uncertainty, supported by positive economic growth and solid corporate earnings. The team remains focused on the fundamentals as the situation evolves.
There’s still a lot we don’t know about where trade negotiations will ultimately land. Rather than reacting to every headline, we’re looking at what the developments actually mean for our portfolios. We’re monitoring conditions closely and regularly reassessing our outlook. Importantly, our portfolios are built with flexibility, giving us different levers we can pull and allowing us to respond quickly if the investment environment changes.
— Craig Maddock, VP & Senior Portfolio Manager, Head of Multi-Asset Management
