Canadian Stocks Set Record As Data Boosts Rate Cut Expectations

(RTTNews) - Canadian stocks hit new record highs, posting modest gains on Friday as softer jobs data indicating a cooling labor market amid economic uncertainty boosted expectations for a rate cut by the central bank, mirroring the scenario in Canada's neighbor the US.

After opening at 29,0002.78 - above the 29K mark for the first time - the benchmark S&P/TSX Composite Index, hit a record intraday high of 29,115.42 within an hour.

The index later drifted down until before managing to gather momentum for the rest of the session to finally settle at 29,050.63, up by 134.74 points (or 0.47%). Today's close is the eighth consecutive all-time high for the index.

Seven of the 11 major sectors rose today, with materials stocks leading the pack.

Data released by Statistics Canada revealed that the unemployment rate in Canada increased 0.2 percentage points to 7.1% in August, the highest level in four years and above market expectations of 7%.

The number of unemployed people increased to about 1.595 million. Youth unemployment remained elevated at 14.5%, largely due to slow hiring for seasonal summer jobs.

Canadian employment fell by 66,000 jobs(-0.3%) in August. The largest declines were in professional, scientific and technical services (-26,000; -1.3%), transportation and warehousing (-23,000; -2.1%), and manufacturing (-19,000; -1.0%).

The Labor Force Participation Rate in Canada edged down to 65.10 percent in August from 65.20 percent in July.

In addition, the Ivey Purchasing Managers Index (PMI), an economic index which measures the month to month variation in economic activity eased to 50.1 in August 2025 from a one-year high of 55.8 in July.

The soft labor market data has increased expectations of a rate cut by the Bank of Canada at their September meeting. Amid broader economic uncertainty, the report marks the second consecutive month of job losses.

The BoC has kept rates steady at 2.75% at its last three meetings since March.

Similarly, in the US, non-farm payrolls data released today revealed a cooling of the labor market, intensifying rate cut expectations during the US Fed's September monetary policy meeting.

The tariff turf turned chaotic as US President Donald Trump's tariff imposition has been judged "illegal" by an appeals court in the US, last Friday.

As the judgement has jeopardized both negotiated framework deals as well as ongoing negotiations, Trump's administration is battling against the verdict in the US Supreme Court with the government asking for a speedy trial. Notably, Trump posted in his social media platform that if the SC upholds the lower court's decision, it would cause US to suffer greatly.

Canada has been slapped with 35% tariff on its exports by the US since August. With the outcome of the trial uncertain, Canada-US trade talks have now hit a new roadblock.

Major sectors that gained in today's trading were Materials (2.56%), IT (2.41%), Healthcare (1.83%), and Real Estate (0.85%).

Among the individual stocks, Equinox Gold Corp (9.02%), Triple Flag Precious Metals Corp (5.44%), Teck Resources Ltd (5.06%), Iamgold Corp (4.81%), and Celestica Inc Sv (9.86%) were the prominent gainers.

Major sectors that lost in today's trading were Financials (0.20%), Industrials (0.31%), and Energy (1.73%).

Among the individual stocks, IA Financial Corp Inc (2.87%), Thomson Reuters (2.12%), Athabasca Oil Corp (3.24%), Arc Resources Ltd (3.14%), and Canadian Natural Resources Ltd (3.07%) were the notable losers.