The S&P/TSX Composite Index slipped 0.2% to close at 36,668 on Monday, retreating from Friday’s record high after the release of CPI data. Canada’s headline inflation accelerated to 3.0%, slightly above the 2.9% consensus forecast. Core inflation measures monitored by the Bank of Canada also ticked higher, reinforcing expectations that the central bank is likely to keep interest rates on hold for the remainder of the year.
Geopolitical tensions in the Middle East remained elevated, with little indication of a near-term resolution. Oil prices moved higher, intensifying concerns about renewed energy-led inflationary pressures. Bond yields also rose, following a sharp increase in long-term US Treasury yields.
Financials lagged, with Royal Bank of Canada, Toronto-Dominion Bank and Bank of Montreal all edging lower. Software and tech-services names also weakened, mirroring declines in US software infrastructure stocks; Shopify fell 3.7%, while Constellation Software dropped 3.2%. Retail names were broadly lower ahead of Friday’s retail sales report, with Alimentation Couche-Tard down 1.6%, Loblaw off 1.8% and Dollarama declining 2.1%.
