Market Watch — Sept. 25, 2026

• Share on Facebook
• Share on Bluesky
• Share on X
• Copy Link

Week in review

thanksgiving long weekend

Snow in the forecast for Alberta, including Hwy 2 corridor, starting Friday

4h ago

kenyon bull & elias mykat

Award-winning students in Maskwacis celebrate first harvest from hydroponic garden

16h ago

Following Annual General Meeting

Red Deer District Chamber welcomes three new board members

17h ago

Tech-led rally fades as U.S.-China summit disappoints

U.S. equities opened the week firmer as an AI-led rally in semiconductors and large-cap technology lifted sentiment and firm flash Purchasing Manager Indices (PMIs) reinforced the growth outlook. Risk appetite faded midweek as the 30-year Treasury yield climbed to its highest since 2004, crude pushed higher on Middle East supply concerns, and the Trump-Xi summit delivered only a trade-truce extension without progress on tariffs, AI guardrails or rare earths. Friday brought relief as reports of a phased U.S.-Iran deal pulled oil lower. Canadian equities took direction from swinging crude, a softer Loonie and retail sales that weakened in July but pointed to an August rebound, keeping Bank of Canada tightening expectations intact. European equities were pressured by a stronger dollar and rising sovereign yields even as Eurozone, German and French PMIs beat expectations, with energy names steadying the tone. Chinese and emerging-market equities were mixed, with tech weakness and weaker yuan fixings offsetting resilient export strength.

• U.S. equities closed 1.23%¹ higher, starting on the front foot as AI enthusiasm carried chip and megacap tech names, losing some momentum midweek when long-end Treasury yields hit two-decade highs and the Trump-Xi meeting yielded little beyond a truce extension.
• Canadian equities returned -0.02X%², steered largely by energy, with crude’s advance and subsequent retreat setting the sector tone, while July’s retail pullback and a firm August advance estimate left rate-hike pricing broadly unchanged.
• European equities finished 0.10%³ higher as dollar strength, firmer oil prices and a hawkish repricing in Bund and gilt yields capped gains, though a 41-month high in Eurozone composite PMIs and rising energy shares offered partial support.
• Emerging market equities were down -0.11%⁴, trading unevenly, with Hang Seng technology weakness and successive softer People’s Bank of China (PBOC) yuan fixings weighing against evidence that China’s export engine continues to offset subdued domestic demand.

Global bond selloff deepens on inflation and energy risk

U.S. Treasuries sold off from the outset as an OECD upgrade to G20 inflation forecasts revived talk of further tightening, and pressure intensified midweek when stronger-than-expected flash PMIs and a poorly received 5-year U.S. Treasury auction drove the 30-year to its highest level since 2004, steepening the curve; yields only retreated Friday as reports of a phased U.S.-Iran deal on the Strait of Hormuz pulled crude lower, though New York Fed President Williams cautioned the Fed cannot look through supply shocks. Canadian bonds tracked the global move and rallied into week-end, with mixed retail sales leaving the Bank of Canada’s hawkish bias intact. European sovereigns underperformed on firm German and French PMIs and hawkish ECB commentary, while Norges Bank hiked and the Riksbank held; JGBs hit 1996 highs.

• The 2- and 10-Year U.S. Treasury yields rose 19 basis points (bps) and 23 bps, respectively. In Canada, the 2- and 10-year sovereign yields were 7 bps and 10 bps higher, respectively. Bond yields and prices move inversely to one another.
• Long-end supply and energy-driven inflation risk dominated, pushing 30-year Treasurys, gilts and JGBs to multi-decade highs before Friday’s oil retreat delivered modest relief across Treasury, Canadian and eurozone curves.
• Issuers showed little hesitation despite elevated absolute yields, with SoftBank pricing a $10 billion multi-tranche deal, underscoring that primary market access remained open even as underlying rates volatility persisted.

Canadian retail sales fall in July, but August advance estimate points to a rebound

Canadian retail sales declined 0.7% month-over-month in July to C$73.7 billion, according to Statistics Canada (StatCan), marking the first monthly decline since December 2025 and ending a run of six consecutive gains through the first half of the year. The result was marginally better than StatCan’s initial flash estimate of -0.8%, though the details pointed to softer underlying momentum. The agency’s advance estimate for August, however, points to a 1.3% rebound that would more than reverse July’s decline. For the Bank of Canada, the mixed signal lands ahead of the October 22 rate decision, and because policymakers will decide before the official August release on October 23, the advance estimate will carry more weight than usual in shaping expectations.

Highlights:

• Weakness in July was broad-based, with eight of nine subsectors posting declines led by general merchandise retailers. Excluding motor vehicles, sales also fell 0.7%.
• Retail sales volumes, the Bank of Canada’s preferred gauge of underlying consumer demand, declined 1.1%. The contraction is notable because gasoline prices rose during the month, suggesting higher fuel costs continued to crowd out discretionary spending and that the real consumer picture was weaker than the nominal headline implied.
• The August advance estimate of 1.3% would represent the strongest monthly gain since early 2026, and advance manufacturing sales are estimated to have risen 1.1%, pointing to broader economic momentum after a softer July.

U.S. business activity surges to five-year high in September as demand strengthens

U.S. business activity accelerated sharply in September, signalling robust economic momentum as both manufacturing and services firms reported stronger growth, according to the latest Purchasing Managers’ Index (PMI) data released by S&P Global. The U.S. Composite PMI Output Index, which measures activity across the manufacturing and services sectors, rose to 58.4 in September from 56.0 in August, reaching its highest level since July 2021. A reading above 50 indicates expansion. The latest result marks a fourth consecutive month of faster growth and points to the strongest pace of private-sector activity in more than five years.

Highlights:

• Growth was broad-based across the economy. The Services PMI climbed to 58.7 from 56.5, its highest level in nearly five years, reflecting strong consumer and business demand. Meanwhile, the Manufacturing PMI advanced to 57.0 from 53.9, the strongest reading since 2022, as factory output and new orders accelerated.
• Survey data showed firms benefited from a surge in domestic demand, with new business growth reaching some of the highest levels seen since early 2022. Companies also increased hiring at the fastest pace in more than four years as they worked to keep up with expanding workloads and rising order backlogs.
• However, the report also highlighted signs of mounting inflationary pressure. Businesses reported higher fuel, transportation and labour costs, while supply chain delays intensified amid strong demand, suggesting capacity constraints are beginning to emerge in some industries.

Eurozone business activity accelerates to 3½-year high in September

Eurozone business activity strengthened sharply in September, with growth reaching its fastest pace in nearly three-and-a-half years as both the manufacturing and services sectors expanded, according to Purchasing Managers’ Index (PMI) data released by S&P Global. The Eurozone Composite PMI Output Index climbed to 53.1 in September from 52.0 in August, well above economists’ expectations and marking its highest level since April 2023. Any reading above 50 indicates expansion. Growth was broad-based across the region. Germany recorded its third consecutive month of expansion and its strongest pace of growth in nearly a year, while France returned to growth for the first time in 10 months.

Highlights:

• The services sector led the improvement, with Services PMI Business Activity Index rising to 53.0 from 51.6 in August, reaching a 10-month high. Manufacturing also remained resilient, with the Manufacturing PMI holding steady at 52.7 while factory output increased to 53.4, its highest level in 55 months.
• New business continued to improve across the currency bloc, with total new orders expanding at the fastest pace since May 2022. Export demand also strengthened, supporting higher output and helping companies work through growing order books.
• Despite the strong growth picture, inflation pressures intensified. S&P Global reported that both input costs and selling prices increased at their fastest rates in four months, driven in part by higher energy prices linked to ongoing geopolitical tensions. Employment growth remained modest, while business confidence slipped to a three-month low.