• Markets close lower as oil prices rebound – The TSX and U.S. equity markets finished lower on Thursday as investors await Iran's response to a proposed diplomatic framework that could guide peace talks. Sector performance was broadly lower, with energy and materials leading the pullback. Bond yields rose, with the 10-year Government of Canada yield at 3.54% and the 10-year U.S. Treasury yield at 4.38%. Internationally, Asian markets were mostly stronger overnight, led by Japan's Nikkei, which reached a record high. Meanwhile, the U.S. dollar strengthened modestly against major currencies.
   
• Jobless claims remain low – U.S. initial jobless claims rose to 200,000 last week but remained below the 205,000 consensus estimate. Continuing claims — which reflect the total number of people receiving benefits — declined to 1.77 million, suggesting more workers are finding new employment. Taken together, we think these figures are consistent with other recent data pointing to a stable labour market. Slower job creation, paired with a moderate pace of layoffs, should help keep wage gains running modestly above inflation, in our view. Friday's U.S. employment report should provide additional insight, with consensus estimates calling for 65,000 job gains, sufficient to hold the unemployment rate steady at 4.3%. Canada's April employment report will also be released tomorrow, expected to show 10,000 jobs added and the unemployment rate remaining unchanged at 6.7%.
   
• Strong earnings season entering the home stretch – With about 85% of S&P 500 companies reporting, earnings results continue to come in better than expected. About 85% have beaten EPS estimates by an average upside surprise of 19%. As a result, EPS growth estimates have been revised up significantly to 28%, from 12.1% at the end of the quarter, which would mark the sixth straight quarter of double-digit earnings growth. We believe these strong results demonstrate that fundamentals remain supportive of equity markets. Technology is leading earnings gains, up more than 50% year-over-year, reflecting demand tied to artificial intelligence and cloud-computing infrastructure. Communication services and materials are also posting strong EPS growth, both up more than 40% from a year ago. Importantly, growth has been broad-based, as 10 of the 11 sectors are posting year-over-year EPS gains. We believe wide earnings growth should help support more balanced market performance across sectors, help reduce reliance on a narrow group of market leaders, and help strengthen the case for portfolio diversification.

Brian Therien, CFA;
Investment Strategy

^{Source for all data: FactSet}

• Stocks close at highs as hopes for an Iran peace deal rise – U.S. and Canadian equities were sharply higher on Wednesday, with the S&P 500 and Nasdaq closing at all-time highs. The rally was driven by reports that a U.S.–Iran deal could come in the days ahead. Oil prices fell on this news, with WTI down about 7% toward $95 levels. In fixed income, U.S. Treasury yields moved lower as declining energy prices reduced near-term inflation concerns, supporting bond prices. Globally, equity markets were broadly higher, with European stocks gaining and several Asian markets advancing as risk sentiment improved. Overall, markets continue to be underpinned by strong and accelerating corporate earnings and resilient economic fundamentals, even as investors navigate ongoing geopolitical uncertainty.
   
• Earnings trends set the tone for markets – First-quarter earnings season is in full swing, with roughly 70% of companies in the S&P 500 having already reported and more than 70 additional companies scheduled to report over the next three days. Results have been strong, with S&P 500 earnings per share on pace to grow 25% year-over-year in the first quarter, double the 12% growth expected at the end of March. A key driver has been continued strength in AI-related investment trends, with the technology and communication services sectors expected to deliver earnings growth of roughly 50% for the quarter. More recently, labour-market conditions have shown signs of stabilization, with nonfarm payrolls rebounding by 178,000 in March and initial jobless claims posting one of their lowest readings on record last week. While risks surrounding the war in Iran remain, we believe robust earnings growth and steady economic activity create a favourable backdrop for equity markets over the balance of the year.
   
• Economic data remains solid – Recent economic data help reinforce what earnings have been telling us. The U.S. economy remains on solid footing. Real GDP grew at a 2% annualized pace in the first quarter, rebounding from the drag caused by last year’s government shutdown. Beyond the headline number, the details were even more favourable, with final sales to private domestic purchasers, a measure that strips out inventory swings, government spending, and trade effects, rising 2.5%, pointing to heathy private‑sector activity. Consumer spending slowed modestly but remains resilient. Rising incomes and higher tax refunds helped offset higher gasoline costs. While energy prices may increasingly weigh on spending as refund season fades, there is no evidence yet of broad deterioration in consumer demand. Elsewhere, business investment was the clear standout. Spending on IT equipment and software alone added roughly 1.5% to GDP growth, reflecting continued AI investment. Taken together, the data suggest that while higher oil prices may act as a headwind if they persist, there is currently little indication that the U.S. economy is cracking.

Mona Mahajan;
Investment Strategy

^{Source for all data: FactSet}

• Stocks finish mixed as Middle East tensions cool – North American equity markets were mixed on Tuesday, while oil prices moved lower, as we believe a lack of further escalation in tensions with Iran supported sentiment toward U.S. stocks. The TSX, however, was weighed down by Shopify shares after the company issued disappointing guidance following its first-quarter earnings announcement, in our view. On the economic front, U.S. JOLTS job openings were little changed from the prior month in March at roughly 6.9 million, suggesting stable demand for labour, while the ISM services PMI declined slightly to 53.6 but remained well above the expansion-contraction threshold of 50, signaling steady business activity, in our view. Bond yields closed slightly lower, with the 10-year Government of Canada yield finishing at 3.60% and the 10-year U.S. Treasury yield at 4.42%.
   
• Earnings and economic trends set the tone for markets – First-quarter earnings season is in full swing, with roughly 70% of S&P 500 companies having already reported, compared with roughly 30% of companies in the TSX. Results have been strong, with TSX earnings on pace to grow 22% year-over-year in the first quarter, supported by solid profit growth in the materials sector. S&P 500 earnings per share are on pace to grow 25% year-over-year, double the 12% growth expected at the end of March, with continued strength in AI-related investment trends serving as a key driver. The technology and communication services sectors within the S&P 500 are expected to deliver earnings growth of roughly 50% for the quarter, highlighting ongoing momentum in technology spending. On the economic front, investors will get an updated read on labour-market conditions beginning today with U.S. JOLTS job openings, while Friday’s Canadian labour-force survey and U.S. nonfarm-payrolls report will round out the week. More recently, labour-market conditions have shown signs of stabilization, with U.S. nonfarm payrolls rebounding by 178,000 in March and initial jobless claims posting one of their lowest readings on record last week. In Canada, employment growth has slowed; however, with labour-force growth also easing, the unemployment rate has remained contained at 6.7% for the past two months. While risks surrounding the war in Iran remain, we believe robust earnings growth and steady economic activity create a favourable backdrop for equity markets over the balance of the year.
   
• Middle East tensions remain in focus – Markets began the week with a modest risk-off move, as military action in the Strait of Hormuz on Monday raised concerns about the durability of the fragile ceasefire between the U.S. and Iran announced in early April. However, stocks rebounded on Tuesday, aided, in our view, by a lack of further escalation and rhetoric from both the U.S. and Iran that points to a preference for a diplomatic solution rather than a further escalation in military action. In response, equity markets closed higher, while oil prices traded lower. Heightened tensions with Iran could slow the pace of gains we have seen in equity markets in recent weeks, particularly after the S&P 500 and Nasdaq each posted their strongest monthly performance in April since the post-pandemic rebound in 2020. However, we believe the longer-term outlook remains favourable for equity markets, supported by steady economic activity and strong corporate profit trends.

Brock Weimer, CFA;
Investment Strategy

^{Source for all data: FactSet}

Monday, 5/4/2026 p.m.

• Markets slide as Middle East tensions flare – Equity markets fell today as renewed tensions in the Middle East pushed oil prices higher. The U.S. and Iran exchanged fire as the U.S. military sought to establish a passage through the important Strait of Hormuz, with separate Iranian missile strikes fired at the U.A.E. In response, WTI oil hit $105 per barrel at the close of the session, up 3% over the day as investors price a greater risk of more prolonged disruptions to energy markets from this conflict. Equities moved lower, with the Dow Jones Industrial Average index down more than 1% and the S&P/TSX index 0.8% lower, although better performance among tech stocks helped cushion declines in the S&P 500 index and the Nasdaq too. Bonds sold off sharply in the face of higher oil prices, with the yield on the two-year U.S. Treasury note up to 3.95% and markets no longer pricing any material chance of Fed rate cuts this year. The move in Canadian bonds was even larger, with the 2-year yield up more than 10 basis points (0.10%) today to 3.05%, and markets pricing more than two 25 basis point (0.25%) hikes in 2026.
   
• Renewed military action casts doubt over ceasefire – Coming into this week the conflict in the Middle East remained in stalemate, with the ceasefire between the U.S. and Iran announced in early April having held, but with few signs of material progress toward a more lasting peace agreement emerging. Iran's latest peace plan, sent over the weekend, called for reparations, Iranian oversight of traffic through the Strait of Hormuz, and no compromises around its nuclear program, and was quickly rebuffed by President Trump. Today's military action follows a U.S. push to open a channel through the Strait of Hormuz, challenging Iran's control over this waterway. The U.S. military characterized today's conflict as 'defensive', and it is not clear that the ceasefire with Iran has been broken. However, the limited progress toward a peace deal, and renewed military tensions in the Persian Gulf, highlight the risk of a more prolonged or larger disruption to global energy markets, which could threaten the increased optimism priced into equity markets in recent weeks.
   
• Growth and earnings backdrop remain supportive – We think rising market optimism in part reflects a growth backdrop that, so far, looks resilient to the oil price spike, and further signs of improving corporate earnings growth. U.S. first-quarter GDP delivered solid-looking underlying growth, helped by resilient household consumption and strong business investment. Meanwhile, the labour market looks to be in good shape, in our view, and consensus expects this Friday's nonfarm-payroll report to support this assessment, with a gain of 60,000 jobs in April seen keeping the unemployment rate steady at 4.3%. Admittedly, Canadian activity rates remain more subdued, with growth tracking a sluggish 1.5% gain in the first quarter and payrolls expected to rise by just 10,000 in April, according to the Bloomberg consensus. Still, we think there are few signs of a hard landing in the Canadian economy, and we continue to expect growth to brighten later this year, helped by an easing in trade policy uncertainty with the U.S. and supportive fiscal policy settings. Overall, the fundamentals around growth and earnings remain supportive for stocks, in our view, even if oil prices continue to pose some downside risk to the outlook.

James McCann;
Investment Strategy

^{Source for all data: Bloomberg, FactSet}

• U.S. stocks hit new highs – U.S. equity markets kicked off May on the front foot, building on a rally over April which was the strongest seen in a single month since 2020. The S&P 500 was up 0.3% over the session, pushing this large-cap index to a new record high, while the Nasdaq index, which has been bolstered by strong performance in the tech sector over recent weeks, was up an even better 0.9%. In Canada, stock markets were steady at the close of the week, with the S&P/TSX index trading 1.7% shy of its all-time highs. WTI oil prices fell over the day, helped by reports that Iran has delivered a new peace proposal to the U.S., but at $102 per barrel these remain elevated. Bonds were little changed, with the yield on the 10-year U.S. Treasury note trading at 4.38%. Gold prices were steady around $4,600 per ounce, and the dollar continues to drift lower against a basket of trade-weighted international currencies, with the rally in the greenback seen through March following the outbreak of the conflict in Iran having now fully reversed.
   
• Stalemate in the Middle East – The ceasefire between the U.S. and Iran continues to hold, but we are seeing limited signs of progress toward a more permanent peace agreement that enables the reopening of the Strait of Hormuz. Markets reacted positively this morning to reports that Iran has delivered a new peace proposal to the U.S. via intermediaries in Pakistan. However, subsequent commentary from both sides indicated that reaching an agreement remains challenging. Iran's foreign minister warned that the U.S. should not pursue "excessive demands" while President Trump commented that Iran is "asking for things I can't agree with". Reports have surfaced that the commander in chief has been briefed on another round of potential military strikes. In our view, we likely need to see more concrete signs of progress start to emerge from these talks to avert further increases in oil prices which could threaten some of the increasing optimism priced into markets.
   
• A big data week – We think market optimism in part reflects hopes for a normalization in global energy supplies over coming months but also increasing confidence over the economic and earnings backdrop. Data over the past week support these hopes, with the economy so far resilient in the face of higher oil prices, and corporate earnings growth coming in even stronger than expected. Next week's U.S. labour-market report will help provide further insight into the economic picture, with consensus expecting a solid if unspectacular gain in payrolls of 60,000 in April, consistent with low unemployment insurance claims over the month and solid labour-market signals across a range of survey data. In Canada, expectations are tilted toward a marginal 5,000 gain in employment over the month, building on the rebound seen in March after a weak start to 2026. If delivered, this would be consistent with a slow-but-steady labour-market backdrop. Meanwhile, the final run of first-quarter earnings reports will help provide further insights into profitability across the corporate sector. In our view, the fundamentals around growth and earnings remain supportive for stocks, even if oil prices continue to pose some downside risk to the outlook.

James McCann;
Investment Strategy

^{Source for all data: Bloomberg, FactSet}