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Monthly Market Recap: Avril 2026

by | May 1, 2026 |

Overview
April 2026 delivered the strongest monthly performance for U.S. equities since November 2020. The S&P 500 gained 10.4% and the Nasdaq surged 15.3%, driven by a sharp relief rally following the announcement of a ceasefire between the United States and Iran on April 8. Markets quickly moved away from worst case scenarios surrounding the Strait of Hormuz, despite the fragile nature of the truce and continued oil volatility throughout the month. Equities instead focused on a very strong earnings season and a broad return in risk appetite. Small caps gained more than 10%, developed international markets rose 7.4%, and the TSX also finished higher despite a consolidation phase in Energy following its March rally.
U.S. Market Performance & Policy
Nine of the eleven S&P 500 sectors finished April higher, with growth stocks clearly leading the market. Communication Services gained 18.5% and Information Technology advanced 17.5%, supported by continued artificial intelligence spending and strong earnings from the Magnificent 7. In contrast, Energy declined 3.5% after its major March rally, reflecting profit taking and sector rotation, though it remained the top performing sector year to date at +33.5%. The Federal Reserve held rates steady at 3.50%–3.75%. Jerome Powell’s final meeting showed significant internal division, with an 8–4 vote split, the largest dissent since 1992. Several members challenged the assumption that rate cuts remain the base case, signaling a more hawkish tone. Markets now expect no rate cuts in 2026, with the first reduction pushed toward late 2027.
Key U.S. Economic Data
Interest rates remained unchanged at 3.50%–3.75%, while March inflation accelerated to 3.3% year over year, including a monthly increase of 0.90%, the largest since 2021. Core inflation came in at 2.6%. ISM Manufacturing remained stable at 52.7 and ISM Services declined slightly while staying in expansion territory. Unemployment edged down to 4.3%. First quarter earnings significantly exceeded expectations, with more than 80% of S&P 500 companies beating forecasts. Earnings growth reached 27%, led by the Magnificent 7 at +61%, compared to 16.4% for the rest of the index.
Oil Markets & Iran Conflict
Oil experienced an extremely volatile month. The announcement of a temporary reopening of the Strait of Hormuz on April 17 caused crude prices to fall more than 10%, before rebounding sharply following renewed military tensions on April 20. Brent crude reached a peak of $126.41 on April 28 before stabilizing near $115. Commercial traffic through the Strait remained far below pre conflict levels, while average U.S. gasoline prices climbed to $4.48 per gallon from $2.98 before the war. Oil therefore ended the month elevated and unstable, with no clear resolution in sight.
Canadian Market Update
The TSX slightly underperformed in April after outperforming in March, weighed down by Energy consolidation as global capital rotated back toward U.S. technology names. Energy and Materials nevertheless remained the best performing TSX sectors year to date, supported by elevated oil prices and continued strength in gold amid geopolitical uncertainty. The Bank of Canada held its policy rate at 2.25% on April 29 for a fourth consecutive meeting. The Bank highlighted moderate economic growth, energy driven inflation pressures, and a cautious approach toward the risk of persistent inflation. The next rate decision is scheduled for June 10, 2026.
Outlook
April’s rebound remains strong but depends on several fragile assumptions: geopolitical stabilization, a lasting reopening of the Strait of Hormuz, and containment of energy driven inflation. Oil futures remain above $80 for late 2026, maintaining structural inflationary pressure. The Fed’s increasingly hawkish tone, leadership transition, and broader macroeconomic uncertainty continue to raise overall market risk. The environment remains supportive for earnings and artificial intelligence related investment in the short term, though selectivity remains critical. Energy, defence, aerospace, and AI infrastructure remain favored sectors, while caution is still warranted toward consumer discretionary and rate sensitive assets.

Monthly Market Recap: March 2026

by | Apr 2, 2026 |

Overview
March 2026 delivered the worst monthly performance for U.S. equities since September 2022. The S&P 500 lost 4.98%, the Nasdaq posted a similar decline, and all major global indices finished negative. The dominant driver was energy: U.S. and Israeli strikes on Iran launched February 28 triggered closure of the Strait of Hormuz, sending Brent crude surging past $120 per barrel before settling near $113 by month end, a 55% increase from pre conflict levels. Canadian equities proved more resilient given the country’s resource exposure. Both central banks held rates unchanged, each confronting the same dilemma: softening growth alongside reaccelerating inflation.
U.S. Market Performance & Policy
The S&P 500 broke below its 50 day moving average on February 27 and its 200 day on March 19. Energy was the clear outperformer as oil names surged with crude, while technology, consumer discretionary, and financials bore the brunt of the selloff as higher for longer rate expectations were repriced sharply upward.
The Fed held at 3.50% to 3.75%. Markets priced virtually no probability of a cut at the April 28 and 29 FOMC meeting and a 77.5% chance of no movement through year end. The era of anticipated cuts has given way to a hawkish holding pattern, with the March CPI print, which is expected to show annual inflation approaching 3.4%, set to confirm the trend.
Key U.S. Economic Data
Federal funds rate: Held at 3.50% to 3.75%. Rate hikes, while not the base case, are no longer off the table. Payrolls: +178,000 in March, well above the 60,000 consensus and a sharp reversal from February’s revised loss of 133,000. Unemployment edged down to 4.3%. Health care led with 76,000 jobs, partly reflecting the return of Kaiser Permanente strike workers. Federal government payrolls fell another 18,000.
CPI: February held at 2.4% headline / 2.5% core. March expected at ~3.4% as the oil shock flows through. ISM Manufacturing: Rose to 52.7; Prices Paid surged to 78.3, a four year high. ISM Services: Slipped to 54.0 from 56.1, remaining in expansion. Prices Paid soared to 70.7, the highest since October 2022, on surging fuel, lumber, copper, and steel costs.
Canadian Market Update
The TSX outperformed U.S. peers, anchored by Energy and Materials, the two sectors most directly benefiting from the oil surge. Gold continued to attract safe haven capital, providing further cushion to Materials even as broader sentiment deteriorated.
The Bank of Canada held at 2.25% on March 18, citing weaker than expected near term growth, an unemployment rate of 6.7%, and February CPI of 1.8%. The BoC flagged that rising energy prices will push inflation higher in coming months, keeping a rate hike on the table. The next decision is April 29, 2026.
Outlook
The Iran conflict has introduced a genuine stagflationary risk vector that is unlikely to resolve quickly. For Canada, the energy windfall provides a structural buffer, though rising fuel costs weigh on consumers and import dependent businesses simultaneously. The current environment favors energy producers, defence and aerospace, commodity linked industrials, and investment grade fixed income. Discipline is warranted on high multiple growth, rate sensitive real estate, and consumer discretionary names.

Monthly Market Recap: February 2026

by | Mar 2, 2026 |

Overview

February 2026 delivered a more challenging environment than January, as a deteriorating U.S. labor market, escalating Middle East tensions following U.S.-Israeli military action against Iran, and AI-disruption fears in the technology sector weighed on sentiment. The S&P 500 finished the month down approximately 0.9%, while the Nasdaq fell 3.4%, though the Dow Jones edged up 0.2%. Canadian equities held up considerably better, with the S&P/TSX Composite delivering a 7.6% price return for the month, propelled by Materials, Financials, and especially Energy, pushing the year-to-date gain to 8.3%. Both central banks remained on hold against a backdrop of elevated uncertainty and conflicting economic signals.

U.S. Market Performance & Policy

U.S. equities were mixed, with the S&P 500 declining as concerns over AI disruption, tariffs, and escalating Middle East tensions weighed on sentiment. The AI narrative shifted sharply from optimism to fears about its impact, pressuring growth stocks while value and small caps posted gains. No FOMC meeting was scheduled for February; the Fed remained in a data-dependent holding pattern at 3.50% to 3.75%, with market pricing in the first potential cut no earlier than the second half of 2026. Looking ahead, investor focus will center on incoming inflation data, the trajectory of geopolitical risk premiums in energy markets, and any Fed communication signaling a recalibration of the easing timeline.

Key U.S. Economic Data

Federal funds rate: Held at 3.50%–3.75%. Policy remains on pause as the Fed balances still-elevated services inflation against a softening labor market.

Unemployment/Payrolls: The U.S. economy shed 92,000 jobs in February, the most in four months, well short of the 59,000 consensus forecast. Health care declined 28,000, reflecting strike activity, while information and the federal government continued to trend lower. The unemployment rate held at 4.3%.

CPI: The CPI rose 0.3% month-over-month and 2.4% year-over-year, with shelter as the largest contributor. Food rose 0.4% and energy climbed 0.6%. Core CPI held at 2.5% year-over-year.

Consumer Confidence: The Conference Board index recovered modestly to 91.2 in February, up 2.2 points from a downwardly revised January reading, though it remained well below the four-year peak of 112.8 reached in November 2024.

ISM Manufacturing: The PMI held at 52.4%, marking a second consecutive month of expansion. Price pressures intensified sharply, with the Prices Paid subindex hitting its highest level since June 2022, driven by steel, aluminum, and tariff-related input costs.

ISM Services: The Services PMI surged to 56.1%, its highest reading since July 2022 and its 20th consecutive month in expansion territory, up 2.3 points from January’s 53.8%, with Business Activity at 59.9% and New Orders at 58.6%.

Canadian Market Update

The TSX delivered a 7.6% price return in February. Materials led by a wide margin, with Financials, Energy, Communication Services, Health Care, Industrials, Consumer Discretionary, and Consumer Staples all posting gains. The only detractors were Real Estate (0.6%) and Technology (6.3%). The Technology underperformance mirrored the U.S. dynamic, as AI disruption fears punished software names globally while resource-linked and hardware-adjacent issuers benefited from the rotation toward tangible assets and earnings visibility. Gold stocks continued to attract capital as a safe-haven allocation, with gold advancing roughly 11% on the month amid elevated geopolitical risk.

On the macro side, the Bank of Canada held its overnight rate at 2.25%, reiterating that the economy continues to adjust to U.S. tariffs and the new global trade landscape, with growth expected to remain modest and inflation projected to stay near the 2% target. The next scheduled BoC decision is March 18, 2026.

Outlook

February reinforces a widening bifurcation: the U.S. services sector is accelerating while the labor market softens, keeping the Fed anchored well into 2026. The Middle East conflict introduces a stagflationary risk vector that warrants close monitoring into Q2. In Canada, the outperformance of Materials and resource linked sectors continues to differentiate the TSX from U.S. equities, though Technology weakness and trade uncertainty remain active drags. The current environment favors quality cyclicals with earnings durability, defensive income-producing assets, and selective commodity exposure, while maintaining discipline around high-multiple growth names exposed to both rate stickiness and AI-driven business model disruption.