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Monthly Overview

Canadian and U.S. equity markets had another positive month in October. Canada’s benchmark stock index (S&P/TSX Composite Index) marked its sixth straight monthly advance, the longest such streak since 2021. U.S. equities hit record highs in October amid easing U.S.-China trade tensions, an interest-rate cut by the U.S. Federal Reserve (the Fed), robust corporate earnings, and an ongoing government shutdown. The S&P 500 Index recorded its sixth consecutive monthly gain, while the Nasdaq Composite extended its streak to seven.

The S&P/TSX Composite was 0.8% higher in October, as six underlying sectors were positive during the month. The gain was led by information technology, rising 13.8%. Small-cap stocks, as measured by the S&P/TSX Small Cap Index, rose 2.2% for the month.

The U.S. dollar appreciated 0.7% versus the loonie in October, boosting the returns of foreign markets from a Canadian investor’s standpoint. U.S.-based stocks, as measured by the S&P 500, gained 3.0% in October (all returns referenced in this paragraph are in Canadian-dollar terms). Six of the benchmark’s underlying sectors were in the green during the month, with information technology leading the gain with a 7.0% return. International stocks, as measured by the FTSE Developed ex-US Index, was up 2.7% during the month, while emerging markets equities rose 2.5%.

The investment-grade fixed-income indices that we follow were positive in October. Canadian investment-grade bonds, as measured by the FTSE Canada Universe Bond Index, gained 0.7% during the month, while the key global investmentgrade bond benchmark rose 0.4%. Global high-yield issues gained 0.8%.

Turning to commodities, natural gas prices surged 24.9% during the month, while the price of a barrel of crude oil lost 2.2%. Gold, silver and copper all had a positive month, gaining 4.1%, 3.3% and 4.8%, respectively.

Inflation in Canada came in at 2.4% year-over-year in September, up from the 1.9% print in August. The Canadian economy added 60,000 jobs in September, and the nation’s unemployment held steady at 7.1%. Job gains were concentrated in manufacturing, health care and social assistance, and agriculture. Statistics Canada reported that real GDP fell 0.3% in August, marking a potential stall in third-quarter growth. The decline was driven by a 0.6% drop in the goods-producing industries and a 0.1% dip in the services industries. The Bank of Canada reduced its target for the overnight rate by 25 basis points (bps), to 2.25%, marking the second consecutive cut from the central bank.

In the U.S., the official September 2025 nonfarm payrolls report was not released in light of the federal government shutdown. The consumer price index rose 0.3% in September, putting the 12-month inflation rate at 3.0%. Higher prices at the pump were partly responsible for the sustained strength in headline inflation. In its October meeting, the Fed cut its target federal funds interest rate by 25 bps, to a range of 3.75%-4.00%. The FOMC also announced an end to its “Quantitative Tightening” program as of December 1.

Content sourced from Bloomberg

Chart of the Month

Monthly Market Statistics

This document was prepared by the Investment Products & Platforms Team. The opinions expressed in this document do not necessarily reflect the opinions of iA Private Wealth Inc.

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