TSX Hits Records as Canada’s Job Market Surprises

Strong Jobs, Gold Gains, and a Record Week for the TSX

Hope you had a great weekend!

Last week was a shorter trading week for Canadian markets because the TSX was closed Monday for the Civic Holiday.

But even with one less trading day, it was still a big week.

• The TSX hit another record high.

• Canada’s job market surprised investors in a good way.

• Gold and mining stocks helped push Canadian stocks higher.

• And in the U.S., weak jobs data actually helped stocks rally because investors became less worried about another Fed rate hike.

But the full story was not perfect…

• Canada’s services sector was still weak.

• Tariff pressure is still hanging over businesses.

• Energy stocks struggled as oil stayed choppy.

• And investors are still watching whether inflation comes back into focus.

So here’s the big question for this week: Is the economy getting stronger… or are markets just celebrating lower rate-hike fears?

Let’s break down what moved the market last week, and what Canadian investors should be watching next: 👇🏾

📈 Market Pulse: TSX Hits a Fresh Record

🇨🇦 TSX Composite (36,381.23 | +3.3% for the week): Canada’s main stock index ended Friday at 36,381.23, up 0.7% on the day.

That was a new record closing high, as the TSX had a strong short week overall.

For the week, Canada’s main stock index gained 3.3%, marking its biggest weekly gain in about four months. But Friday’s move was especially important.

On Friday, the TSX hit a fresh record closing high, helped by mining and real estate stocks. Materials rose 4.7% that day as gold climbed to a 7-week high.

Some gold names had a big day too. B2Gold jumped 22.5%, while IAMGOLD rose 13.7% after both companies reported quarterly results.

Real estate also helped on Friday, rising 1.1%. That makes sense because real estate is rate-sensitive. When investors think rates may not rise as much, real estate stocks can get some relief.

But not every sector was strong on Friday.

• Financials fell 0.4%.

• Energy lost 1.1%.

• And oil remained choppy as investors watched talks around the Strait of Hormuz.

💡 Simple takeaway:
The TSX had a strong short week and hit a fresh record. Materials and real estate helped lead the way, while energy and financials reminded investors that not every part of the market was moving together.

💼 Canada Jobs: The Labour Market Surprised Investors

The biggest Canadian economic story last week was the July jobs report.

Canada added 75,100 jobs in July, and that was much stronger than expected. Economists were only expecting about 16,500 new jobs.

The unemployment rate also fell from 6.5% to 6.4%, its lowest level since July 2024. That’s relevant because a stronger job market can be a sign that the economy is holding up better than people feared.

And the details were solid.

Full-time employment rose by 38,600 jobs.
Part-time employment rose by 36,600 jobs.

Job gains were mainly in the private sector, with strength in areas like:

• Wholesale and retail trade

• Finance and insurance

• Professional and scientific services

This was encouraging because it showed businesses are still hiring, even with tariffs, trade uncertainty, and global tension in the background.

💵 Wage Growth Cooled

There was also an important detail on wages.

Average hourly wages rose 2.8% year over year in July, slower than the 3.3% increase in June.

⚠️ Note: Wage growth can affect inflation.

When wages rise quickly, businesses may pass higher labour costs on to customers through higher prices. So cooling wage growth can give the Bank of Canada some comfort.

⚙️ Canada PMI: Manufacturing Improved, But Services Stayed Weak

Canada’s manufacturing sector expanded at its fastest pace in more than 4 years. The S&P Global Canada Manufacturing PMI rose to 53.5 in July, up from 53.0 in June. A PMI above 50 means the sector is growing.

But the services side of the economy did not look as strong. Canada’s services PMI stayed below 50 for a second straight month, rising to 49.1in July from 47.1 in June. That means the services sector was still shrinking, just at a slower pace.

New business also stayed weak, and business confidence fell to its lowest level since June 2025.

💡 Simple takeaway:
Canada’s jobs report was stronger than expected. That is good news for the economy, but it may also give the Bank of Canada more reason to stay patient instead of rushing to cut interest rates. While the economy is showing improvement, it is not strong everywhere. Manufacturing looked better, while services were still under pressure. That is why investors need to look at more than one data point.

🇺🇸 U.S. Markets: Bad Jobs News Became Good Market News

U.S. stocks also had a strong week.

For the week:

• S&P 500: up 3.58%

• Nasdaq: up 5.19%

• Dow: up 2.96%

The S&P 500 closed at a record high on Friday, while the Nasdaq had its best week since April.

But here is the interesting part: The rally came after a weak U.S. jobs report.

The U.S. economy lost 23,000 jobs in July, even though economists expected a gain of about 80,000.

That is a BIG miss. Normally, weak jobs data can scare investors… but this time, investors focused on interest rates. If the job market is weakening, the Federal Reserve may be less likely to raise rates in September.

📝 In simple terms: Bad economic news became good stock market news because it lowered rate-hike fears.

📊 Earnings Helped Too

Strong earnings also helped U.S. markets.

So far, about 85% of S&P 500 companies that reported results beat analyst expectations. That helped calm some concerns around AI spending and Big Tech valuations.

Investors still care about AI, but they want proof. They want to see real revenue, real profits, and real business results. Companies that showed strength were rewarded. Companies that disappointed were punished.

💡 Simple takeaway: U.S. markets rallied because weak jobs data reduced Fed rate-hike fears and strong earnings helped support investor confidence. But the economy losing jobs is still something investors need to watch carefully.

💵 Trade and Tariffs: Still the Big Risk Underneath

Trade was still one of the biggest issues for Canada last week.

Canada’s merchandise exports rose 0.4% in June to a record $77.5 billion. Imports also edged up 0.2% to a record $73.6 billion.

That left Canada with a merchandise trade surplus of about $3.9 billion, up slightly from $3.7 billion in May.

On the surface, that sounds positive.

More exports can be good because it means Canadian goods are being sold to other countries… but the trade story is still complicated.

Imports from the United States rose 3.0% to a record high, helped by higher imports of computers and computer parts. At the same time, Canada and the U.S. are still dealing with tariff threats and CUSMA-related pressure.

Prime Minister Mark Carney said Canadian negotiators were still in detailed talks with U.S. officials about the trade pact review, but the two sides still appear far apart, and Trump is threatening more tariffs on Canadian imports unless Canada makes concessions.

🚨 Why this headline matters:

• Tariffs can make goods more expensive.

• They can hurt business confidence.

• They can pressure jobs.

• And they can affect inflation if companies pass higher costs on to consumers.

💡 Simple takeaway: Canada’s trade numbers looked strong, but tariff risk is still a major cloud. A trade surplus is good, but uncertainty with the U.S. is still important because Canada’s economy is deeply tied to cross-border trade.

🔎 What to Watch Next

1. U.S. Inflation Data

The biggest report to watch this week is U.S. inflation. The July CPI report comes out Wednesday. Investors will be watching closely because inflation can affect what the Federal Reserve does next.

If inflation comes in hot, rate-hike fears could come back. If inflation cools, markets may feel more relief.

2. U.S. Retail Sales

U.S. retail sales come out Friday.

Consumer spending is a huge part of the U.S. economy. So, if consumers are still spending, that can support company earnings. But if spending slows, it could raise concerns about the economy.

3. Canadian Building Permits

Canada’s June building permits report comes out this week (Wednesday).

This helps show whether builders are starting new projects or pulling back. That is major for housing, construction jobs, and the broader economy.

4. Canadian Manufacturing Sales

Canada’s June manufacturing sales report also comes out this week.

This will help confirm whether the manufacturing strength we saw in last week’s PMI data is showing up in actual sales.

5. Canada-U.S. Trade Talks

Tariffs and CUSMA are still major issues.

Investors will be watching to see if Canada and the U.S. can make progress before the next tariff deadline. This is important for Canadian businesses, exporters, jobs, inflation, and the Canadian dollar.

6. Oil, Gold, and the Strait of Hormuz

Oil and gold are still major headlines for Canadian investors.

Gold helped lift mining stocks last week. Oil stayed choppy because of uncertainty around the Strait of Hormuz. If oil rises again, energy stocks could benefit, but inflation concerns may also come back.

📝 Final Thought: Strong Data, Strong Markets… But Still Not a Clear Picture

Last week looked strong on the surface.

• The TSX hit a record.

• Canada added far more jobs than expected.

• The Canadian dollar strengthened.

• Gold helped lift mining stocks.

• And U.S. stocks rallied hard.

But the story underneath is still mixed.

• Canada’s services sector is still weak.

• Tariffs are still a real risk.

• Business costs are still rising.

• Oil is still sensitive to global headlines.

• And the U.S. job market may be showing signs of weakness.

That is why this market is tricky.

Good news can be good news. Bad news can also be treated like good news if investors think it helps interest rates. But beginners should not get caught up in one headline.

• A record TSX does not mean every company is healthy.

• A strong jobs report does not mean every household feels comfortable.

• And a market rally does not mean risks have disappeared.

The lesson is simple: Look at the full picture.

• Jobs matter.

• Inflation matters.

• Trade matters.

• Rates matter.

• Earnings matter.

• And your personal financial plan matters most.

Markets move fast, but your financial plan should move with purpose.

And that’s where having the right guidance can help.

Are you just saving money, or are you using it to actually build wealth?

My 1:1 strategy 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 effectively.

📲 Click here to book a 1:1 Investment Strategy Call

Stay calm, stay diversified, and keep compounding.

Cheers 💫

Your Wealth Coach,

Finance Femster