GDP Rebounds, TSX Nears Records, and AI Stocks Pull Back
Hope you had a great weekend!
Last week was a shorter trading week on both sides of the border.
Canadian markets were closed Wednesday for Canada Day, and U.S. markets were closed Friday for Independence Day.
But even with fewer trading days, there was still a lot for investors to watch.
The TSX climbed close to record territory, Canada’s economy rebounded more than expected, and softer U.S. jobs data helped reduce fears of another Fed rate hike.
But chip stocks stayed under pressure, CUSMA uncertainty returned after the U.S. declined to extend the deal in its current form, and investors are still trying to figure out whether this market rally has enough support to keep going.
So the big question this week is simple: Is the market gaining real strength, or just getting relief from lower rate fears?
Here’s your Finance Femster 🇫🇷⚽️🇫🇷 breakdown of the week that was: 👇🏾
📈 Market Pulse: TSX Climbs Near Record Highs
🇨🇦 TSX Composite (35,274.84 | +0.8% for the week): Canada’s main stock index ended Friday at 35,274.84, up 0.9% on the day and 0.8% for the week.
That marked the TSX’s highest closing level since its record close on June 16.
The move was broad-based, with nine of the TSX’s 10 major sectorsfinishing higher on Friday. Materials led the way, while consumer staples appeared to be the main laggard.
For the full week, materials rose over 4.5% as gold and copper prices climbed, helping lift mining stocks.
💵 The Loonie Got Some ReliefThe Canadian dollar also got a bit of help last week.
The loonie strengthened to its best level in about 10 days after weaker U.S. jobs data weighed on the U.S. dollar.
In simple terms: When the U.S. dollar weakens, the Canadian dollar can sometimes catch a break… but the loonie is not fully out of the woods.
Trade uncertainty, oil prices, and Canada’s own interest rate outlook are still major factors.
💡 Simple takeaway:
The TSX had a broad-based week, but the leadership came from sectors outside the usual U.S.-style mega-cap tech story. Materials, real estate, health care, and technology all helped Canada’s market move closer to record territory. But the loonie and trade uncertainty are still reminders that Canada’s market has risks under the surface.
🇨🇦 Canada GDP: The Economy Rebounded
The biggest Canadian economic story last week was GDP.
Canada’s economy grew 0.5% in April, beating expectations for 0.4%growth.
That was the strongest monthly expansion in 9 months.
This is important because the previous GDP report raised concerns that Canada had entered a technical recession, but April’s rebound helped calm some of those fears.
The details were encouraging too:
14 of 20 sectors grew in April
Goods-producing industries: up 1.2%
Mining, quarrying, and oil and gas extraction: up 2.9%
Construction: up 0.7%, its first growth in five months
Manufacturing: up 0.6%
Services-producing industries: up 0.3%
Statistics Canada’s early estimate also showed the economy likely grew another 0.1% in May.
📊 What this means:
Canada’s economy looked better than feared, but that does not mean everything is perfect.
Tariffs, CUSMA uncertainty, weak business investment, and slower job growth are still important risks.
But the April GDP report made the “Canada is falling into a deeper recession” story look less certain.
💼 Canada’s June jobs report:
Canada’s next jobs report comes out this week Friday, and it will be important.
After April GDP came in stronger than expected, investors now want to see if the labour market is holding up too.
If job growth stays strong, it could make the Bank of Canada less likely to rush into rate cuts.
But if hiring weakens, it may bring recession concerns back into the conversation.
💡 Simple takeaway:
Canada’s economy showed signs of life. After the technical recession scare, April’s GDP rebound gave investors and the Bank of Canada a reason to be a little less worried.
🌎 CUSMA and Tariff Uncertainty Return
Another big Canadian story last week was CUSMA.
The CUSMA review officially began, and the U.S. declined to extend the agreement in its current form.
That does not mean the trade deal ends right away.
The agreement still remains in place, but the decision starts a longer review process and a 10-year countdown unless Canada, the U.S., and Mexico agree on changes.
The big concern is tariffs.
CUSMA helps many goods move between Canada, the U.S., and Mexico with lower or no tariffs. So if the deal becomes more uncertain, businesses may worry about future tariffs, higher costs, and more complicated cross-border trade.
That highly matters for sectors like:
Autos
Steel
Aluminum
Agriculture
Manufacturing
Energy
For everyday Canadians, tariffs can eventually show up as higher prices because businesses often pass higher costs on to consumers.
On the plus side: Canada also announced plans for a new oil pipeline from Alberta to the Pacific coast. This could give Canada more ability to export oil to Asia and rely less on the U.S. market.
💡 Simple takeaway:
CUSMA is not gone, but uncertainty is back. The risk is that tariffs become a bigger bargaining chip again, which could make trade more expensive and business planning harder.
🇺🇸 U.S. Markets: Dow Hits a Record, But Chips Drag
U.S. markets also had a shorter trading week because markets were closed Friday for Independence Day.
For the week:
Dow: up about 2.0%
S&P 500: up about 1.8%
Nasdaq: up about 2.1%
The headline looked positive.
The Dow closed at a record high on Thursday after weaker U.S. jobs data reduced fears of a near-term Fed rate hike… but the market was not strong everywhere.
The Nasdaq fell on Thursday because chip stocks dropped sharply again.
On Thursday, the final U.S. trading day of the week, the PHLX Semiconductor Index fell 5.4%, falling sharply for a second straight day.
Some big chip names were under pressure too:
AMD: down 4.3%
Micron: down 5.5%
SanDisk: down 14.1%
The reason was not that the AI story suddenly disappeared. It was more about profit-taking and high expectations.
Chip stocks have already had a massive run this year, so investors are becoming more selective. When a sector has gone up a lot, even a small concern can lead to a bigger pullback.
Investors are still asking:
Are AI stocks priced too perfectly?
Are companies spending too much on AI data centres?
How long will it take for all this AI spending to turn into real profits?
Can chip earnings keep up with the hype?
💼 U.S. Jobs: Softer Data Calmed Rate Fears
The U.S. economy added only 57,000 jobs in June, well below expectations for 110,000.
That is a big miss. The unemployment rate was 4.2%, roughly in line with expectations.
In simple terms: The U.S. labour market is cooling, and that helped markets because a cooler job market can make the Federal Reserve less likely to raise rates quickly.
But it also raises another question: Is the economy cooling in a healthy way, or is it starting to slow too much?
💡 Simple takeaway: U.S. stocks had a decent short week, but the market was not calm. The Dow hit a record because softer jobs reduced rate fears, while chip stocks struggled because investors are still questioning AI valuations. The AI story is still alive, but the market is no longer giving every chip stock a free pass.
📝 Final Thought: Relief Is Good, But Proof Matters More
Last week was a good reminder that markets can rally for different reasons.
The TSX rose because materials, energy, and financials helped carry the index.
Canada’s GDP rebound helped calm recession fears.
U.S. stocks got support because softer jobs data made rate hikes feel less urgent.
But the warning signs did not disappear.
Chip stocks still looked shaky.
CUSMA uncertainty came back.
Tariff risk is still part of the trade conversation.
The loonie still has risks.
And investors are still asking whether the AI rally has gone too far, too fast.
That is why this market is not just about whether stocks are up or down.
It is about what is driving the move.
A strong GDP report does not mean every household feels strong.
A record Dow does not mean every stock is winning.
And a rising market does not mean there are no risks.
Markets move fast, but your financial plan should move with purpose.
And that’s where having the right guidance can help.
If you have a TFSA (or you’re thinking about opening one) here’s the real question:
Are you just saving money in it, or are you using it to actually build long-term wealth?
My 1:1 Financial Planning calls are designed to help you understand how your TFSA works, what to invest in, and how to build a plan that matches your goals.
Because starting is good, but starting properly is what helps you grow, Femi.
📲 Click here to book a 1:1 Investing Strategy Call
P.S. Also, keep an eye on your inbox this Wednesday morning.
I’ll be sending out my 6 Stocks to Watch This Month newsletter, including a few names that could be worth paying attention to as earnings, AI, interest rates, and consumer trends keep moving the market.
Stay calm, stay diversified, and keep compounding.
Cheers 💫
Your Wealth Coach,
Finance Femster