Overview

In the U.S., major equity benchmarks were little changed in November, with the S&P 500 edging up about 0.1% as strength in healthcare and select defensive balanced weakness in technology and other prior leaders. In Canada, the S&P/TSX Composite pulled back from mid‑month records but managed to hit a new all time high in the last day of the month, supported by gains in cyclicals, energy, and materials. Across both markets, investors focused on central‑bank communication, labour trends, and late‑year inflation data to gauge how far the current easing cycle can progress.​

U.S. Market Performance & Policy

The S&P 500 finished November essentially flat at +0.13%, extending an already strong year even as leadership broadened away from mega‑cap growth. Healthcare outperformed, while large‑cap growth and the Nasdaq underperformed as investors rotated out of crowded AI‑related trades and reassessed earnings expectations.​

Sentiment turned more cautious as consumer confidence fell sharply and manufacturing data remained in contraction, even as services activity stayed in expansion territory. The Federal Reserve, having cut rates earlier in the fall, maintained a data‑dependent tone and signalled that future moves will hinge on how inflation and labour conditions evolve from here. Key releases to watch into December and January include updated CPI prints, delayed jobs data, and fresh FOMC projections that will help clarify the likely pace of any 2026 rate cuts.​

Key U.S. Economic Data

• Federal Funds Rate: Target range around 3.5%–3.75% after recent 25‑basis‑point cuts, marking a gradual shift toward easier policy.​

• Unemployment Rate: The November employment report showed only modest job gains, with mixed signals around underlying labour‑market momentum.​

• Consumer Confidence Index: The Conference Board index dropped to 88.7 in November, the lowest since April, reflecting heightened concern over income, jobs, and tariffs.​

• ISM Manufacturing Index: Manufacturing PMI remained below 50, indicating continued contraction in factory activity.​

• ISM Services Index: Services PMI stayed above 50, pointing to ongoing though moderating expansion in the larger services economy.​

Canadian Market Overview

The S&P/TSX Composite experienced increased volatility through November, trading roughly 1.2% below earlier peaks mid‑month before ultimately revisiting and surpassing prior record highs late in the period. Strength in energy, financials, and resources that had driven gains earlier in the year gave way to more mixed sector performance as investors digested softer global growth signals and shifting expectations for U.S. monetary policy.​

Labour data surprised positively: Canada added about 54,000 jobs in November, and the unemployment rate declined to 6.5%, its second consecutive monthly improvement and an encouraging sign for domestic demand. Against this backdrop, the Bank of Canada kept its policy rate at 2.25% in December, reinforcing October’s message that policy is now close to neutral and that further moves will depend on incoming inflation and growth data. With inflation moderating and growth steady but unspectacular, markets interpreted this stance as supportive for risk assets without signalling an imminent acceleration in easing.​

Key Canadian indicators to monitor into year‑end include headline and core CPI, additional labour‑market releases, and business sentiment surveys, all of which will shape expectations for any further Bank of Canada action in the first half of 2026.​

Outlook

Heading into December, both U.S. and Canadian markets face a familiar trade‑off: easier monetary policy and still‑healthy employment versus weakening confidence and patchy manufacturing data. For long‑term investors, the focus remains on whether inflation can continue to cool without a material deterioration in labour conditions, and how sensitive equity valuations are to any downside surprise in growth or geopolitics.​

Overview

U.S. equities delivered another strong month in October, with major indexes reaching new record highs. Solid corporate earnings, ongoing enthusiasm around AI-driven innovation, and a broadly supportive monetary backdrop continued to reinforce market momentum. While the government shutdown delayed several economic releases, investor sentiment remained constructive. As markets enter November, the focus turns to the Federal Reserve’s policy path, upcoming labour data, and inflation indicators that will guide expectations for the durability of U.S. growth. 

U.S. Market Performance & Policy 

The S&P 500 rose 2.3% in October, the Dow gained 2.5%, and the Nasdaq advanced 4.7%, extending multi-month rallies across all major benchmarks. Technology led the market once again, driven by strength in semiconductors and AI-related activity. Healthcare also performed well, while Materials lagged with a notable decline. 

Corporate earnings for the third quarter exceeded expectations, helping sustain investor confidence despite the ongoing government shutdown. However, market breadth narrowed, with mid-cap and value segments underperforming. Even with delayed data releases, optimism held firm as investors looked ahead to key monetary and economic signals.

The main policy event was the Federal Reserve’s 25 basis points rate cut, bringing the federal funds rate to a range of 3.75% to 4.00%. While the move reflected a more dovish stance, policymakers avoided committing to further easing, keeping future decisions dependent on inflation and employment trends.

Heading into November, markets are watching the next Fed meeting, along with updated inflation and labour reports, for confirmation that economic activity remains on stable footing. 

Key Economic Data 

• Federal Funds Rate: Lowered by 25 basis points to 3.75%-4.00%, marking a cautious shift toward easing
• Unemployment Rate: Official data was delayed, but private estimates place unemployment near 4.3%, mostly unchanged
• Consumer Confidence Index: Fell slightly to 94.6, indicating modest cooling in expectations
• ISM Manufacturing Index: Declined to 48.7, pointing to deeper contraction in factory activity
• ISM Services Index: Improved to 52.4, returning to expansion on stronger business activity and new orders

U.S. Market Outlook 

October underscored a market defined by resilient earnings, proactive monetary policy, and fiscal uncertainty. As November begins, investors will closely monitor upcoming labor and inflation reports, the potential resolution of the government shutdown, and additional signals from the Federal Reserve for direction heading into year-end.

With monetary conditions easing and corporate fundamentals holding firm, U.S. markets approach the close of 2025 with cautious optimism tempered by policy risks.

Canadian Market Overview 

The S&P/TSX Composite delivered a steady 1% increase through October. Energy was the strongest contributor as oil prices advanced on global supply concerns, supporting broader market resilience. Materials also gained, benefiting from a mild rebound in gold prices that helped lift mining names. Financials added stability, with banks showing consistent domestic performance and steady credit conditions. While corporate earnings were generally constructive, market sentiment remained balanced by uncertainty around monetary policy and the potential impact of evolving trade measures. 

The month’s primary policy event was the Bank of Canada’s widely anticipated 25-basis-point rate cut, bringing the policy rate to 2.25%. The decision signalled a more cautious stance, with policymakers indicating a preference to pause before considering additional easing. This approach reflects an effort to support a cooling economy while remaining attentive to stubborn inflation dynamics. Looking ahead, investors will focus on labour market strength, upcoming inflation data, and global trade signals, particularly given recent volatility in commodity markets. 

Key Economic Data

• Bank of Canada Rate: The policy rate was lowered by 25 basis points to 2.25%, the lowest since mid 2022, with officials suggesting a near-term pause
• Unemployment Rate: Unemployment held near 7.1%, highlighting continued weakness in goods-producing industries
• Consumer Confidence: The Ipsos index remained slightly negative at –6, reflecting cautious sentiment toward the macro backdrop
• Manufacturing PMI: The PMI improved slightly to 49.6, still below expansion levels but showing signs of stabilization

Overview

September defied its reputation as a difficult month for equities, with major U.S. indexes reaching record highs and delivering their strongest September performance in more than a decade. The U.S. Federal Reserve (Fed) and the Bank of Canada (BoC) each lowered their key interest rates by 25 basis points, boosting market sentiment and increasing risk appetite. In the U.S., gains were concentrated in technology and artificial intelligence related sectors, while Canadian markets were led by strong results in the Materials sector. The main question now is how policy easing will balance the pressures of persistent inflation and a weakening labor market. 

U.S. Market Performance and Policy 

The S&P 500 rose 3.5% in September, marking its strongest performance for the month in nearly fifteen years. The NASDAQ 100 was the standout index, gaining 5.5% and reaching new record highs. The rally broadened as the small cap Russell 2000 also hit new records. Returns were driven mainly by large cap Technology and Communication Services stocks, continuing the momentum from the ongoing artificial intelligence investment cycle. Defensive sectors such as Consumer Staples underperformed. 

The key market event was the Federal Reserve’s decision to reduce its target rate by 25 basis points to a range of 4.00 to 4.25%. The move signaled a focus on addressing a softening labor market even as inflation remains elevated. Looking ahead, investors will watch the September employment report and inflation data to assess the likelihood of further rate cuts, while also following the broader effects of tariff policies and the threat of a government shutdown. 

Key Economic Data 

• Fed Funds Rate (Target Range): Lowered by 25 basis points to 4.00 to 4.25%
• U.S. Unemployment Rate (August): Increased to 4.3%, the highest level since October 2021
• Consumer Confidence Index: Dropped to 94.2, the lowest reading since April
• ISM Manufacturing PMI: Registered at 49.1, showing a seventh consecutive month of contraction, though at a slightly slower pace than in August
• ISM Services PMI: Held steady at 50.0, but the Business Activity component recorded its first contraction since May 2020

Markets enter the final quarter with cautious optimism. Monetary easing, robust corporate earnings, and resilient fundamentals provide support, while risks tied to valuations, consumer sentiment, and political developments remain key factors to monitor. 

Canadian Market Overview 

The S&P and TSX Composite Index ended September with a solid gain of 5.1%, reaching new record highs. As in the U.S., the Bank of Canada served as a major catalyst by cutting its policy rate by 25 basis points to 2.50%. The adjustment aimed to support the domestic economy at a time when inflation remains below the 2 percent target and early signs point to a softer labor market. 

The Materials sector was the strongest performer for the month, supported by global demand and improved risk sentiment. Foreign investment in Canadian securities was also robust, with international investors purchasing 31.3 billion dollars, primarily in Canadian debt securities. With trade tensions between Canada and the U.S. still present, policymakers continued to advocate for broader trade diversification with global partners, a factor that remains central to Canada’s long term outlook.

Key Economic Data

• Bank of Canada Rate: The policy rate was cut by 25 basis points to 2.5%, the lowest since July 2022, as officials pointed to slowing growth and moderated inflation.​

• Unemployment Rate: The national unemployment rate rose to 7.1%, reaching a nine-year high, with pronounced job losses in goods-producing sectors.​

• Consumer Confidence: The Ipsos index remained slightly negative at -5, reflecting cautious sentiment toward the macro backdrop.

• Manufacturing PMI: The PMI ticked lower to 47.7, still below expansion levels but still above the lows of the first quarter of 2025. 

The strong performance in September reflects investors’ willingness to look beyond short term economic weakness in response to central bank support. Looking ahead, market participants are expected to monitor the trajectory of Canadian exports amid shifting trade arrangements, the resilience of labour markets, and the path of inflation, which recently moderated below the bank’s 2% target.