Stock Market Recap: July Gains & the Big Questions for August
Canada’s Market Ends July Higher as Investors Look Ahead
Hope you had a great long weekend!
Last week closed the book on July, and honestly, the month gave investors a lot to think about.
Canada’s stock market finished July higher again, even though the final trading day of the month was weak.
Canada’s economy also gave investors a positive surprise, with GDP coming in stronger than expected and second-quarter growth now tracking much better than the Bank of Canada had forecast.
But the story was not all clean.
Gold pulled back. Tech stayed choppy. Tariffs kept pressure on businesses. And U.S. investors were still trying to decide whether all this AI spending is actually worth it.
That’s what made last week interesting… July ended with gains, but August is starting with a few big questions:
Is Canada’s economy actually finding its footing?
Can energy and commodities keep supporting the TSX?
Will AI earnings continue to calm investors?
And will tariffs, oil prices, and interest rates bring new pressure back into the market?
Let’s break down what moved the market last week, and what Canadian investors should be watching next.👇🏾
📈 Market Pulse: TSX Slips Friday, But July Still Ends Higher
🇨🇦 TSX Composite (35,226.14 | +1.1% for July): Canada’s main stock index ended Friday at 35,226.14, down 0.8% on the day.
Materials fell 3% on Friday as gold prices dropped. Technology also fell 2.6%, with Telus dropping sharply after reporting a second-quarter loss and cutting its dividend.
That was not the prettiest way to end the month, but the bigger picture was still positive. For July, the TSX gained 1.1%, marking its fourth straight monthly gain.
That shows that Canadian stocks still had support, even with all the noise around tariffs, oil, inflation, and global tension. However, the biggest month-end story was energy.
Energy stocks helped lead the TSX higher in July, with the sector gaining more than 16% for the month.
That makes sense because oil prices were strong through much of the month, helped by Middle East tension and worries about shipping through the Strait of Hormuz.
💡 Simple takeaway:
The TSX ended July higher, but the last day of the month showed that Canada’s market is still sensitive. Energy was the major support, while gold, tech, and company-specific news created pressure.
🇨🇦 Canada GDP: The Economy Looked Better Than Expected
The biggest Canadian economic story last week was GDP. Canada’s economy grew 0.3% in May, beating expectations for 0.2% growth.
April’s GDP was also revised higher to 0.6%, making it the strongest monthly gain since July 2025, and Statistics Canada’s early estimate showed the economy likely grew another 0.2% in June.
This means Canada’s second quarter may have been much stronger than expected.
Based on the latest numbers, second-quarter GDP is tracking around 3.4% annualized. That is higher than the Bank of Canada’s July forecast of 2.5%.
📝 In simple terms: Canada’s economy may be doing better than people thought. And that is cause for a mild celebration, because just a few months ago, investors were worried about Canada falling deeper into recession concerns.
Now, the economy is showing signs of life again… but we still need to be careful. The reality is, some of the strength may have come from temporary factors, like World Cup-related activity, census hiring, and oil companies delaying maintenance because oil prices were high.
So yes, the data was good, but we still need to ask: Is this real, lasting strength? or was part of this just temporary support?
💡 Simple takeaway:
Canada’s GDP report gave investors relief. The economy looked stronger than expected, which may give the Bank of Canada more reason to stay patient on rates instead of rushing to cut.
🇺🇸 U.S. Markets: AI Worries Eased, But July Was Still Choppy
U.S. markets also had a big week:
S&P 500: up 1.05%
Nasdaq: up 1.59%
The week did not start smoothly though… On Wednesday, U.S. stocks sold off after the Federal Reserve held rates steady and investors got nervous about chip stocks and AI-related earnings.
The S&P 500 fell 1.52% that day.
The Nasdaq fell 1.74%.
The Dow fell 2.19%.
A big reason was AI disappointment.
Investors were already worried that companies were spending too much money on AI infrastructure. Then chip-related names came under pressure again.
SK Hynix reported a huge profit jump, but it still fell short of what investors were hoping for. Vertiv, a company tied to AI infrastructure, also dropped after missing revenue expectations.
That tells us something important: When expectations are extremely high, even good results may not be enough. But by the end of the week, Big Tech helped calm investors down.
Amazon jumped more than 15% after posting its strongest quarterly revenue growth in over four years. Microsoft also added to its gains after surging more than 15% on Thursday, helped by stronger-than-expected cloud growth.
That helped investors feel better about AI spending.
📝 In simple terms: Investors were asking, “Are these companies spending too much on AI?” Amazon and Microsoft helped answer, “Maybe the spending is starting to pay off.”
But July still showed that AI stocks are not getting a free pass anymore. For the month, the S&P 500 ended roughly flat, while the Nasdaq fell3.2%.
So even though the week ended better, July was still choppy for tech.
💡 Simple takeaway: AI is still a major market driver, but investors want proof now. They are not just excited by the word “AI.” They want to see revenue growth, profit growth, and real business results.
📊 Month-End Big Picture: What July Taught Investors
July gave us a few clear lessons.
🛢️ First, the TSX can still perform well when energy is strong.
Energy was one of the biggest reasons Canada’s market finished July higher.
🇨🇦 Second, Canada’s economy may be stronger than people expected.
After recession worries earlier this year, the latest GDP numbers gave investors some relief.
🤖 Third, AI is still powerful, but more selective.
Microsoft and Amazon helped calm fears, but the Nasdaq still finished July lower. That shows investors are becoming pickier.
💱 Fourth, tariffs are still a major risk.
Canada’s economy is deeply connected to trade, especially with the U.S. So any tariff pressure can affect business costs, inflation, jobs, and investor confidence.
📆 And fifth, August is starting with a lot on the table.
We have jobs data, trade data, earnings, oil headlines, and more tariff updates to watch.
💡 Simple takeaway:
July was a positive month for Canada’s market, but it was not a simple one. The TSX moved higher, GDP improved, and AI fears cooled by month-end… but risks are still sitting underneath.
🔎 What to Watch Next
1. Canada’s July Jobs Report
Canada’s next Labour Force Survey comes out this Friday.
This is one of the most important reports to watch, because jobs tell us if the economy is actually holding up for the average Canadian. GDP can improve, but if hiring weakens, people may still feel pressure.
If Canada’s job market stays steady, it could support the idea that the economy is finding its footing. But if jobs come in weak, recession concerns could come back quickly.
2. Canada’s Trade Data
This morning, Canada’s trade surplus came in stronger than expected.
Canada posted a $3.86 billion trade surplus in June, the highest in four years. That sounds good, but there is an important detail… Statistics Canada said the number was helped by a weaker Canadian dollar.
📝 In simple terms: A weaker loonie can make Canadian exports look stronger because foreign buyers may find Canadian goods cheaper, but it does not automatically mean the whole economy is stronger.
3. U.S. Jobs and Fed Expectations
Investors will also be watching U.S. labour data this week.
The Fed is still trying to bring inflation back down, and jobs data can affect what it does next.
If the U.S. labour market stays strong, the Fed may feel more comfortable keeping rates high or even hiking again, but if hiring slows, markets may start betting that the Fed has less room to stay aggressive.
4. AI earnings and Big Tech
AI is still one of the biggest stories in the market.
Amazon and Microsoft helped calm investors last week, but investors still want proof. They want to know if companies spending billions on AI can turn that spending into real profit. That means earnings reports and forecasts from AI-linked companies will keep moving the market.
5. Oil, Gold, and Middle East Headlines
Oil and gold are still important for Canadian investors.
Oil is major because it affects energy stocks and inflation. And Gold is important because it affects materials and mining stocks.
Middle East headlines are still moving both. So, if tension rises, oil and gold can jump. If peace talks improve, oil may cool off and markets may breathe a little easier.
📝 Final Takeaway
July was a good reminder that markets do not move because of one headline. They move because of many stories happening at once.
The TSX finished July higher because energy was strong.
Canada’s GDP report helped calm recession worries.
Big Tech earnings helped reduce some AI fears.
But there were still warning signs:
Gold pulled back.
Tech stayed choppy.
Tariffs kept pressure on businesses.
And investors still had questions about interest rates, oil, and AI spending.
For August, investors now need proof.
Proof that Canada’s economy can keep growing.
Proof that job growth is holding up.
Proof that AI spending can turn into real profits.
Proof that tariffs will not create too much pressure for businesses and consumers.
But until we get all that proof…
Stay calm, stay diversified, and keep compounding.
Cheers 💫
Your Wealth Coach,
Finance Femster