TSX gains, U.S. markets see ‘breadth and strength’ ahead of Fed rate decision

TORONTO – Canada’s main stock index closed higher on Monday, while U.S. markets hit new highs as investors await interest rate decisions on both sides of the border this week. 

Carol Schleif, chief market strategist at BMO Private Wealth, said she was surprised by the “breadth and strength” of Monday’s trading session, which came ahead of interest rate announcements by the U.S. Federal Reserve and Bank of Canada on Wednesday.

She said recent economic data from the U.S. is “supportive of a goldilocks narrative” whereby employment is weak enough to give the Fed room to cut rates, “but the overall economy stays pretty strong.”

Schleif noted that U.S. inflation is sticky and while it’s no longer falling, it’s not necessarily rising either. 

“It’s just the right scenario, if you will, for markets to think that the Fed will cut not just once, but multiple times. I think that’s what the market’s looking for,” she said. 

However, the rate path is less certain for the Bank of Canada, she said. 

“It’s less unanimous the feeling about what the Bank of Canada may do in terms of already being at the forefront of the pack, having lowered the most globally already and having low rates,” Schleif said. 

The S&P/TSX composite index was up 147.20 points at 29,431.02.  

In New York, the Dow Jones industrial average was up 49.23 points at 45,883.45. The S&P 500 index was up 30.99 points at 6,615.28, while the Nasdaq composite was up 207.65 points at 22,348.75. 

The S&P 500 topped its prior all-time high, which was set last week. Meanwhile, the Nasdaq composite added 0.9 per cent to its own record.

Tesla rose 3.6 per cent after Elon Musk bought stock worth roughly $1 billion through a trust. The electric vehicle company’s stock price came into the day with a slight loss for the year so far, and the purchase could be a signal of Musk’s faith in it.

“That piece is helpful, especially since the magnificent seven are such a disproportionate proportion of indexes overall,” Schleif said.  

She also said the lack of market volatility during August and September was noteworthy. 

“We wouldn’t be surprised to see some volatility come into the markets, because they’ve been pretty unanimously solid,” Schleif said. 

She noted that the performance of equity markets in August came as a surprise to many investors, and September, outside of the first trading day of the month, has also performed well so far. 

Schleif said this is not typical, but she views the underlying fundamentals as strong. 

The Canadian dollar traded for 72.44 cents US compared with 72.21 cents US on Friday.

The October crude oil contract was up 61 cents US at US$63.30 per barrel. The December gold contract was up US$32.60 at US$3,719.00 an ounce.

— With files from The Associated Press.

This report by The Canadian Press was first published Sept. 15, 2025.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)