Podcast
Headwinds vs. Tailwinds
Will Simpson and Greg Wise
September 5, 2025
A look at what’s been pushing markets higher and where things might go from here.
Stocks bounced back this week, helped along by a pullback in bond yields and rising hopes for rate cuts on both sides of the border. The Nasdaq led the way, up +1.8%, with the TSX not far behind at +1.6%. In sector moves, Canadian tech was up +5.0%, while U.S. tech was more modest at +0.9%, and energy lagged sharply in both markets. Outside of stocks and bonds, gold pushed to another all-time high as investors leaned into the safety. The gold companies continue to print money in this enviroment.
The economic driver this week was jobs. Both Canada and the U.S. posted weaker-than-expected employment numbers. In the U.S., August payrolls came in soft, job openings continued to decline, and unemployment nudged higher, fueling an almost certainty that the Fed will cut this month. In Canada, it was an even bleaker picture, with over -65,000 jobs lost in August and the unemployment rate jumping to 7.1%. That number makes it seem likely the BoC will cut alongside the Fed.
Looking ahead, next week’s U.S. CPI report will be the key test for markets. A softer print could give central banks the green light to deliver on the rate cuts investors are now pricing in, while any upside surprise could quickly reignite the debate about whether policy easing is really around the corner.
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