# Canada Market Week in Review: The TSX Slips as the Trade War Bites and the Bank of Canada Holds
This was a week dominated by two forces: the escalating trade war with the United States and a cautious central bank. Together they pulled Canadian stocks lower, even as a late-week rally in banks and gold miners cushioned the damage. Here is your recap of what moved the Canadian market and economy in the week ending September 11, 2026.
The TSX Had a Losing Week
The headline is red. The S&P/TSX Composite Index fell roughly 1.7% on the week, its weakness driven by the trade tensions and a slump in telecom heavyweights. It did claw back some ground on Friday, rising about 0.54% to close near 35,697, but that bounce was not enough to save the week. Telecom giant BCE was a notable drag on the index over the five sessions.
The bigger picture is the same one we covered in the US-Canada trade war escalation: tariffs and retaliation are weighing on Canadian equities, and the market is split by sector.
The Bank of Canada Held Steady
The week's biggest economic event was the Bank of Canada's rate decision. The central bank left its policy rate unchanged at 2.25% for a seventh consecutive meeting. The BoC acknowledged the economy's recent momentum but flagged a clear worry: the escalating trade friction with the US. Crucially, it framed those tensions as more of a confidence risk than an immediate hit to growth and inflation, a signal that it is watching, but not yet panicking. It continues the steady-hand approach we saw at its September 2 decision.
A Soft Jobs Report
The economic data did not help the mood. Canada's August employment report showed the economy lost about 41,000 jobs. There was a silver lining: because the labour force shrank at the same time, the unemployment rate held steady at 6.4%. But wage growth also softened to around 2%, a sign the labour market is cooling. It is the kind of data that keeps the Bank of Canada cautious and reluctant to tighten.
Where the Trade War Hurts Most
The pain from the tariff fight is not evenly spread. A smaller group of trade-exposed industries, autos, steel, aluminum and lumber, is bearing the brunt of the damage. These sectors sell heavily into the US market, so tariffs hit them directly, while more domestically focused parts of the economy are more insulated. That divergence is the defining feature of this trade war for investors.
The Friday Bright Spots: Banks and Gold
The week ended on a better note thanks to two groups:
- Banks bounced. Credit-sensitive financials recovered on Friday, with TD Bank (TD.TO) and Bank of Montreal (BMO.TO) up around 0.8% each, and Scotiabank (BNS.TO) adding about 0.9%.
- Gold miners shone. Gold prices rebounded, lifting Canada's heavyweight miners. Agnico Eagle (AEM.TO) rose about 2.2%, while Wheaton Precious Metals (WPM.TO) and Franco-Nevada (FNV.TO) each gained roughly 2.4%.
Helping the tone, oil prices pulled back as diplomatic efforts raised hopes of easing tensions around the Strait of Hormuz, taking some pressure off the inflation picture.
The Bottom Line
Canada's week was a story of a market under pressure but not in freefall. The trade war and a soft jobs report set a cautious tone, the Bank of Canada stayed on hold, and the TSX ended down about 1.7%, but a Friday rally in banks and gold miners showed the market still has pockets of strength.
Our take: This remains a market where sector selection matters more than the index level. The trade war punishes autos, metals and trade-exposed industrials, while gold miners act as a natural hedge and banks swing on rate and credit sentiment. With the Bank of Canada firmly on hold and trade tensions unresolved, expect more of this choppy, two-speed action. For a longer view on which names are holding up, see our roundups of the best and worst performing Canadian stocks of 2026. Key risk to watch: a further escalation in the US-Canada trade war, which would deepen the hit to trade-exposed sectors and test the Bank of Canada's "confidence risk" assessment.---
This article is for informational purposes only and is not financial advice. Always do your own research before investing.
