Table of Contents

Market Context
What Happened
Why It Matters
Sector Breakdown
Risks to Watch
What to Watch Next
Final Outlook

Market Context

Canadian markets are closed today for the Civic Holiday, giving investors a moment to reflect on a Friday session that closed out a genuinely eventful two weeks with a modest pullback, even as underlying economic data pointed to real strength in the domestic economy.

What Happened

The S&P/TSX Composite fell 0.8% Friday to close at 35,226, pressured by losses in mining and technology stocks. Gold miners led the declines, with Agnico Eagle down 3.6%, Barrick losing 2.5%, and Wheaton Precious Metals falling 3.9%, as gold prices weakened amid a sharp rise in long-term U.S. Treasury yields. Technology shares also underperformed, led by Shopify, down 4.3%, and Celestica, down 6%, as investors turned cautious ahead of Shopify’s second-quarter 2026 earnings, scheduled for August 5. On the earnings front, Fairfax Financial and Cameco both reported revenue above expectations but missed earnings-per-share estimates, while Enbridge beat forecasts for adjusted second-quarter profit despite its shares slipping 1.8%. Imperial Oil reported quarterly earnings above expectations, with profit doubling on higher crude prices and stronger refining margins. Away from corporate results, Canada’s economy showed genuine strength: a first estimate put second-quarter GDP growth at 0.8%, the fastest pace in nearly two years, while May’s monthly GDP reading came in at 0.3%, slightly above forecast and marking a second consecutive monthly increase, reinforcing the Bank of Canada’s view that the economy is adjusting to recent shocks.

Why It Matters

Friday’s pullback illustrates how sector-specific pressures, in this case gold and technology, can outweigh genuinely positive macro data on any given trading day. Even with Canada’s strongest quarterly GDP growth in nearly two years, the index still finished lower, underscoring how much near-term sentiment continues to be driven by interest rate expectations and pre-earnings positioning rather than broader economic fundamentals.

The pre-earnings caution ahead of Shopify’s August 5 report reflects the stock’s outsized weight and volatility within the technology sector. A 4.3% single-day decline for one of the index’s largest constituents, ahead of a closely watched earnings release, is a reminder of how much index-level performance can hinge on positioning around a handful of major names.

Sector Breakdown

Materials faced the sharpest pressure Friday, with gold miners retreating broadly as rising bond yields weighed on the metal’s appeal. Technology also underperformed meaningfully, with both Shopify and Celestica declining as investors positioned cautiously ahead of upcoming earnings and amid broader global technology sector uncertainty. Energy offered a partial counterbalance, with Imperial Oil’s strong results and continued oil price gains supporting the sector even as Enbridge’s own beat didn’t translate into share price gains.

Risks to Watch

The most immediate risk is that Shopify’s upcoming earnings, given the stock’s substantial index weight, produce further volatility that could ripple across the broader TSX regardless of how other sectors perform. Continued upward pressure on bond yields, following last week’s contentious Federal Reserve decision, could extend the pressure seen in gold miners and other rate-sensitive names. Broader oil price strength, while supportive for energy stocks, continues to carry inflation implications that could complicate the policy outlook for both the Bank of Canada and Federal Reserve.

Also Read: Best long term Canadian stocks

What to Watch Next

Investors should watch Shopify’s earnings report Wednesday, August 5, closely, given the stock’s substantial weight within the TSX Composite and this week’s cautious pre-earnings positioning. Continued bond yield trends will remain relevant for gold miners and other rate-sensitive sectors once trading resumes tomorrow. Canada’s strong GDP data may also factor into upcoming Bank of Canada commentary on the path of interest rates.

Final Outlook

The TSX closed out last week on a cautious note, with sector-specific pressures in gold and technology outweighing genuinely strong underlying economic data. With markets closed today and Shopify’s pivotal earnings report landing later this week, investors should expect the index’s near-term direction to hinge heavily on that release.

Verdict: Cautiously constructive, with Shopify’s upcoming earnings as the key near-term catalyst.