October 2025 market update

October was a month of mixed signals. While equities climbed and AI leaders like NVIDIA surged, Canada faced trade setbacks and a slowing labour market. The Bank of Canada responded with another rate cut.

November 6, 2025

Introduction

Global equity markets moved higher over October. Despite some concerns about trade, the U.S. and China reached a trade truce, while the U.S. Federal Reserve Board lowered interest rates. There were bouts of volatility as U.S.-China trade tensions temporarily escalated. The global economy demonstrated its resiliency despite trade and geopolitical tensions.

The Canadian economy continues to run at a soft pace as trade tensions with the U.S. persist. Inflation rose and the labour market continued to show signs of moderating. Canada remains without a trade deal, although negotiations were ongoing before being halted late in the month. The Bank of Canada (BoC) lowered its policy interest rate at its October meeting.

The U.S. government shut down at the beginning of October, as the two major parties were unable to reach an agreement on a new spending bill. At the crux of their disagreement was the extension of health care subsidies. With the government shutdown continuing over the entire month, several key economic indicators released by the government were delayed. At the end of October, the government shutdown was the second largest in history.

The S&P/TSX Composite Index edged higher, led by the information technology sector. U.S. equities also moved higher. Yields on 10-year government bonds in Canada and the U.S. declined. The price of gold increased over the month, reaching a new record high. The price of oil ticked lower.

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