September 2025 market update

Markets gained ground in September, lifted by rate cuts and easing inflation. Canadian and U.S. equities reached record highs, with materials leading performance. Gold rose, oil slipped.

October 7, 2025

Introduction

Global equity markets posted a gain over the month of September. Optimism towards risk assets was boosted as expectations grew that the U.S. Federal Reserve Board (Fed) was closing in on an interest rate cut. The Fed did lower interest rates at the end of September. Data still pointed to relatively shaky global economic conditions. While inflation has come down, the threat of upward pressure from tariffs persists. Meanwhile, the Bank of England, European Central Bank and Bank of Japan held their key policy interest rates steady in September.

In September, Statistics Canada reported that Canada’s gross domestic product expanded more than expected in July, before stalling in August, according to estimates. Inflation remained below the Bank of Canada’s (BoC) 2% target, while the unemployment rate ticked higher to its highest level since 2021. In response, the BoC lowered its key policy interest rate near the end of the month.

Interest rate cuts from the BoC and Fed helped bring down the yield on 10-year government bonds in Canada and the U.S. in September. The S&P/TSX Composite Index advanced and reached new record highs. The materials sector was the best-performing sector. U.S. equities also gained and recorded new record closing prices. The price of gold rose over September, while the price of oil finished lower.

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