The S&P/TSX Composite Index slipped to trade near 36,500 on Friday after the release of labor market data from both Canada and the United States. Canadian employment fell by 41,700 in August, defying expectations for a 15,000 increase and reversing a strong gain of 75,100 in July. The softer labor numbers may strengthen the case for a more dovish Bank of Canada. Still, despite holding rates steady on Wednesday, Governor Tiff Macklem reiterated that policymakers remain prepared to raise borrowing costs if inflation stays elevated.
In contrast, US nonfarm payrolls rose by 162,000, roughly triple the consensus forecast. The robust report bolstered expectations for a Federal Reserve rate hike in September, putting pressure on credit-sensitive stocks. Major Canadian banks traded largely unchanged, while Brookfield slipped more than 0.5%.
Weaker gold prices weighed on the mining sector, which has been a key support for the index in recent months. Shares of Agnico Eagle, Barrick, and Wheaton Precious Metals each fell by about 2%. Oil prices also retreated, dragging energy producers lower, with Canadian Natural Resources down nearly 1%.
