Monthly highlights of major events which drive financial markets, along with perspectives on what they mean and why they matter.
August in review
Global equities advanced in August, supported by investor optimism over a potential Federal Reserve rate cut, strong corporate earnings, and resilient economic data that lifted confidence across regions. Canada’s S&P/TSX Composite gained 4.96%, with strength in materials (15.87%) and health care (9.22%) offset by weaker results in industrials (-0.05%) and consumer staples (-0.77%). In the U.S., the S&P 500 rose 2.03% in U.S. dollar terms, led by materials (5.76%) and health care (5.38%), while utilities lagged (-1.58%). Fixed income delivered modest gains, with Canadian bonds up 0.37% and U.S. bonds advancing 1.20%. Commodities were mixed as gold rose 5.00% while WTI crude (-6.14%) and natural gas (-6.37%) fell. Emerging markets posted varied results, with China’s Shanghai Composite up 8.09%, while India’s Sensex (-1.55%) and South Korea’s KOSPI (-1.71%) declined.
Here are some of August's most notable events:
Trade winds falter, household spending provides partial relief. Canadian GDP contracted 0.4% (1.6% annualized) in the second quarter of 2025, reversing a 0.5% (2.0% annualized) gain in the first quarter, which was revised down from the initially reported 2.2% annualized. The decline was led by weaker goods exports and lower business investment in machinery and equipment, partly offset by stronger household spending, faster inventory accumulation, and reduced imports. Export (-3.3%) and import (-2.3%) prices fell as firms partially absorbed tariff-related costs, leading to the terms of trade—the ratio of the price of exports to the price of imports—to fall approximately 1.1%.
Tariff takedown: U.S. appeals court says Congress calls the shots, Trump’s IEEPA tariffs on hold. On August 29, a U.S. appeals court ruled in a 7–4 decision that President Trump’s tariffs under the International Emergency Economic Powers Act (IEEPA) are unlawful, emphasizing that tariff authority rests with Congress. The ruling upheld an earlier Court of International Trade decision striking down measures such as “Liberation Day” tariffs on China, Canada, and Mexico, while leaving tariffs on steel, aluminum, copper, and automotive products in place since these tariffs fall under a different law. The decision has been stayed until October 14 to allow for a potential Supreme Court appeal, with importers continuing to pay IEEPA tariffs as litigation proceeds.
| Index† | Change (%) | Index Level | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| Treasury Bill (FTSE Canada 60 Day T-Bill) | 0.22 | 1.90 | 3.30 | 189.25 |
| Canadian Bonds (FTSE Canada Universe Bond) | 0.37 | 1.07 | 2.95 | 1,181.34 |
| Canadian Equities (S&P/TSX Composite) | 4.96 | 17.60 | 25.88 | 28,564.45 |
| U.S. Bonds (Bloomberg U.S. Aggregated Bond, US$) | 1.20 | 4.99 | 3.14 | 2,298.22 |
| U.S. Equities (S&P 500, US$) | 2.03 | 10.78 | 15.85 | 6,460.26 |
| Global Equities (MSCI World, US$) | 2.64 | 14.13 | 16.19 | 4,177.72 |
| Emerging Markets (MSCI Emerging Markets, US$) | 1.46 | 19.59 | 17.61 | 1,258.44 |
| Currencies† | Change (%) | Exchange Rate | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| C$/US ($) | 0.83 | 4.67 | -1.82 | 0.7277 |
| C$/Euro (€) | -1.53 | -7.28 | -7.20 | 0.6226 |
| C$/Pound (£) | -1.43 | -3.02 | -4.57 | 0.5388 |
| C$/Yen (¥) | -1.61 | -2.09 | -1.18 | 107.058 |
| Commodities (US$)† | Change (%) | Price | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| Gold Spot ($/oz) | 5.00 | 27.08 | 33.46 | 3,516.10 |
| Oil WTI ($/barrel) | -6.14 | -6.98 | -7.12 | 64.01 |
| Natural Gas ($/MMBtu) | -6.37 | -17.19 | -6.93 | 3.00 |
†Total Return, as at August 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.
Canada’s labour market weakened in July. Employment declined by 41,000 (-0.2%) in July, driven largely by losses in full-time positions. Looking at the data by age group, the declines were primarily among youth aged 15 to 24. Private sector employment fell, partly offsetting gains recorded in May and June, while public sector employment and self-employment remained mostly unchanged. Although there were net job losses for the month, the unemployment rate held steady at 6.9% as labour force participation remained stable. Of the 1.6 million people unemployed in July, 23.8% were in long-term unemployment, defined as searching for work for 27 weeks or more. This was the highest share since February 1998, excluding the COVID-19 years of 2020 and 2021.
Did you know?
AI search startup Perplexity has made an unsolicited $34.5 billion all-cash bid to acquire the Chrome browser, a key product of Alphabet—the parent company formerly named Google. The offer, which exceeds Perplexity’s own valuation, would provide access to a vast global user base and could reshape competition in search. The move comes as Alphabet faces heightened pressure following a major antitrust ruling that found it had monopolized open-web digital advertising markets.
