August 2026 market update
Canada Life - Sep 09, 2026
Introduction
Global equity markets finished higher over the month of August 2026. There were some bouts of volatility as geopolitical tensions in the Middle East showed little signs of concluding, while trade tensions between Canada and the U.S. flared up late in the month. Meanwhile, trading in artificial intelligence stocks remains overall bullish, but there are some concerns about their potentially high valuations. Inflation remained elevated over the month, even accelerating in some parts of the world. Inflation concerns are reemerging, which is leaving investors to wonder if central banks may raise interest rates. Data from major economies showed the global economy continues to expand, albeit at a relatively muted pace, as it faces major headwinds from higher prices, geopolitical tensions and trade disruptions.
In Canada, the S&P/TSX Composite Index moved higher over the month, getting a strong performance from the materials and information technology sectors. U.S. equities also posted a gain in August. Yields on 10-year government bonds in Canada and the U.S. finished higher. The price of gold increased over the month, while the price of oil finished largely unchanged.
Canada-U.S. trade tensions intensify after negotiations fall apart
Trade tensions between Canada and the U.S. escalated sharply in August after negotiations collapsed just before a midnight deadline for new tariffs to be imposed by the U.S. on Canada. Canadian Prime Minister Mark Carney accused the U.S. of introducing unfair, last-minute changes to the proposed deal, while U.S. Trade Representative Jamieson Greer said Canada had backed away from terms it had already agreed to. In response, the U.S. imposed 50% tariffs on roughly US$20 billion (C$28 billion) of Canadian goods, including dairy, alcohol, cement and hockey equipment. Carney called it an attack on Canada
Market performance - as of August 31, 2026
| Equity Markets | Level | Month to date | Month to date (C$) | Year to date | Year to date (C$) | 1 year | 1 year (C$) |
|---|---|---|---|---|---|---|---|
| S&P/TSX Composite Index C$ | 36,270.48 | 2.96% | 2.96% | 14.38% | 14.38% | 26.98% | 26.98% |
| MSCI USA Index US$ | 7,329.69 | 2.66% | 1.41% | 12.21% | 13.34% | 18.66% | 19.77% |
| MSCI EAFE Index US$ | 3,233.25 | 1.80% | 0.56% | 11.77% | 12.90% | 18.77% | 19.87% |
| MSCI Emerging Markets Index US$ | 1,719.31 | 3.21% | 1.96% | 22.43% | 23.67% | 36.62% | 37.90% |
| MSCI Europe Index US$ | 2,877.17 | 1.23% | 0.00% | 8.87% | 9.97% | 17.47% | 18.57% |
| MSCI AC Asia Pacific Index US$ | 278.19 | 3.11% | 1.86% | 22.19% | 23.43% | 31.53% | 32.76% |
Fixed Income Markets | Level | Month to date | Month to date (C$) | Year to date | Year to date (C$) | 1 year | 1 year (C$) |
|---|---|---|---|---|---|---|---|
| FTSE Canada Universe Bond Index C$ | 1,205.12 | -0.21% | -0.21% | 0.44% | 0.44% | 2.01% | 2.01% |
| FTSE World Investment Grade Bond Index US$ | 229.65 | 0.44% | -0.78% | -0.47% | 0.54% | 0.77% | 1.70% |
Currencies | Level | Month to date | Month to date (C$) | Year to date | Year to date (C$) | 1 year | 1 year (C$) |
|---|---|---|---|---|---|---|---|
| CAD/USD | 0.7218 | 1.20% | - | -0.94% | - | -0.82% | - |
Commodities | Level | Month to date | Month to date (C$) | Year to date | Year to date (C$) | 1 year | 1 year (C$) |
|---|---|---|---|---|---|---|---|
| West Texas Intermediate (US$/bbl) | 85.76 | 1.94% | - | 50.31% | - | 34.84% | - |
Gold (US$/oz) | 4,437.38 | 9.93% | - | 2.97% | - | 29.00% | - |
Silver (US$/oz) | 66.58 | 15.56% | - | -7.12% | - | 67.57% | - |
Commodities | Level | Month to date | Month to date (C$) | Year to date | Year to date (C$) | 1 year | 1 year (C$) |
|---|---|---|---|---|---|---|---|
| West Texas Intermediate (US$/bbl) | 85.76 | 1.94% | - | 50.31% | - | 34.84% | - |
Gold (US$/oz) | 4,437.38 | 9.93% | - | 2.97% | - | 29.00% | - |
Silver (US$/oz) | 66.58 | 15.56% | - | -7.12% | - | 67.57% | - |
This commentary represents Canada Life Investment Management Ltd.'s views at the date of publication, which are subject to change without notice. Furthermore, there can be no assurance that any trends described in this material will continue or that forecasts will occur; economic and market conditions change frequently. This commentary is intended as a general source of information and is not intended to be a solicitation to buy or sell specific investments, nor tax or legal advice. Before making any investment decision, prospective investors should carefully review the relevant offering documents and seek input from their advisor. You may not reproduce, distribute, or otherwise use any of this article without the prior written consent of Canada Life Investment Management Ltd.
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