Stock & Bond Markets Today

Friday 8/21/2026 p.m.

Markets rebound on Friday – U.S. and Canadian equity markets were higher across the board on Friday as investors looked for buying opportunities after a near 2.0% sell-off in the S&P 500 earlier this week. The Canadian TSX outpaced the S&P 500 and the tech-heavy Nasdaq. This comes as Canada and the U.S. move closer to finalizing a trade deal that would avoid 50% tariffs on roughly $20 billion of Canadian goods. Meanwhile, U.S. Treasury Secretary Bessent announced on Wednesday that the Treasury would at least double its buybacks of longer-dated Treasury securities, increasing purchases from roughly $2 billion to at least $4 billion, and suggested the buybacks could be expanded further if needed. He also noted that the administration would unveil a plan for fiscal consolidation in the days ahead. While Treasury yields have stabilized somewhat, they remain near the highs of the year, with the 10-year yield at about 4.73% and the 30-year yield at around 5.27%. In our view, the U.S. 10-year yield is likely to remain in the 4.5% to 5.0% range, and upcoming inflation readings will likely be critical inputs for both yields and the Federal Reserve interest rate decision.
What do higher yields mean for investors? – Treasury yields are close to the highs of the year, with the 30-year Treasury yield near the highest level since 2007. What do higher yields mean for investors? First, the cost of borrowing increases, both for consumers, in areas like mortgages and auto loans, and for corporations looking to tap the debt market. But keep in mind, this economy has been able to grow steadily even with fluctuating yields. Higher yields also mean there is an alternative to equity markets, which can put downward pressure on stocks and valuations. Perhaps the silver lining is that for savers, or for those in retirement, near retirement or just looking for income, higher Treasury yields may provide that income opportunity. In addition, from the perspective of the Federal Reserve, higher yields also mean that the market is doing some form of tightening for the Fed.
U.S. economic surprise index moves lower this month – The Citi U.S. economic surprise index, a measure of how U.S. economic data comes in versus forecast, has moved lower in recent weeks, indicating some cooling of the momentum in the U.S. economy. The index, which peaked at around 63 in early June, is now around 21 levels, suggesting economic surprises are still positive, but the magnitude and frequency of these upside surprises have eased. This likely has been driven by weaker-than-expected nonfarm-jobs reports as well as softer retail-sales and inflation readings. Overall, we believe that the U.S. economy has remained resilient, but that the Federal Reserve may consider this recent cooling as it debates whether to raise rates at the September FOMC meeting. In our view, if this backdrop of elevated Treasury yields and moderating economic data holds, the Fed may keep rates steady rather than raise rates and risk further deterioration in consumption and growth.

Mona Mahajan;
Investment Strategy

^{Source for all data: FactSet.}

Markets close lower as bond yields rebound – The TSX and U.S. equity markets ended lower on Thursday as bond yields reversed some of yesterday's decline. The 10-year Government of Canada yield rose to 3.75%, and the 10-year U.S. Treasury yield finished near 4.70%. Consumer staples and consumer discretionary stocks led markets lower, while energy outperformed on higher oil prices. The weakness in consumer-oriented sectors, combined with the rebound in yields, suggests investors remain sensitive to the outlook for household spending and interest rates, in our view. In international markets, Asia finished higher overnight, while Europe ended mostly lower. In energy markets, WTI oil extended its recent advance to about $87 per barrel amid ongoing disruptions in the Strait of Hormuz. The U.S. dollar was little changed against major currencies.
Walmart headlines a busy week for retail earnings – Walmart, widely viewed as a bellwether for consumer spending, reported solid second-quarter results, with earnings and revenue exceeding forecasts. However, the company's outlook was softer than expected, weighing on its shares, which were down about 9% on the day. Together with other recent data, Walmart's stronger-than-expected sales provide further evidence that consumer spending remains resilient, in our view. With the unemployment rate contained at 4.1% and 7.4 million job openings still exceeding the 6.9 million unemployed workers, we expect the stable labour market to continue to provide growing income to help support household spending and the broader economy.
Leading economic index strengthens – The Conference Board's U.S. Leading Economic Index (LEI) rose 0.2% in July to 99.5, exceeding forecasts for a 0.1% increase. The index is designed to provide an early signal of potential turning points in the business cycle and the near-term direction of the economy. July's improvement was driven primarily by lower unemployment claims, higher housing permits, and a steeper yield curve. The index's six-month change turned positive for the first time in more than four years and is not currently signaling recession risk. Overall, we believe these readings remain consistent with a resilient economy, as labour-market stability and improving housing indicators offset weak consumer expectations and softer manufacturing orders.

Brian Therien, CFA;
Investment Strategy

^{Source for all data: FactSet.}

Wednesday 8/19/2026 p.m.

Markets edge higher as bond yields pull back – The TSX and U.S. equity markets closed higher on Wednesday, supported by a decline in bond yields following the announcement of increased U.S. Treasury buybacks. Lower yields appeared to provide a near-term tailwind for equity valuations. In international markets, Asia and Europe finished mostly lower. In energy markets, WTI oil prices extended their recent advance, currently near $84 per barrel amid continued disruptions in the Strait of Hormuz. The U.S. dollar declined against major currencies, consistent with the drop in Treasury yields.
Bond yields decline following U.S. Treasury buyback announcement – Bond yields moved lower today, with the 10-year Government of Canada yield near 3.69% and the 10-year U.S. Treasury yield near 4.64%. The decline followed the U.S. Treasury announcement that it will roughly double the size of its liquidity-support buyback operations for longer-dated securities in the 10-year to 30-year maturity range. The change will take effect September 9, 2026, and remain in place until at least November 4, 2026. The Treasury noted that the larger operations are intended to improve liquidity in longer-dated securities. In our view, the announcement may help ease near-term liquidity pressures and improve market functioning, which could support prices and place downward pressure on yields, particularly for long-term bonds. However, it does not address what we consider the key factors driving bond yields, including federal budget deficits, inflation expectations, rising AI-related borrowing, and Federal Reserve policy.
U.S. pauses proposed 50% tariffs on select Canadian goods – The Trump administration suspended the previously announced 50% tariffs for three days, allowing additional time for negotiations. The administration said Canada had expressed a commitment to reduce or remove certain tariffs and other trade barriers affecting U.S. exports. The proposed U.S. tariffs would have applied to nearly $20 billion of Canadian goods, primarily in the automotive, alcoholic beverage and dairy industries. Certain qualifying goods covered by the Canada-U.S.-Mexico Agreement (CUSMA) would also be subject to the tariffs. However, exemptions would limit the affected trade to about 5% of the $382 billion in Canadian imports in 2025. The pause reduces the immediate risk of escalation, but its short duration means some uncertainty remains, in our view. Until a broader agreement is reached, businesses in the affected industries may continue to face planning challenges, potential supply-chain disruptions, and uncertainty over future costs.

Brian Therien, CFA;
Investment Strategy

^{Source for all data: FactSet.}

Stocks close lower amid elevated interest rates – North American equity markets closed lower on Tuesday, as elevated bond yields and weakness in technology stocks weighed on sentiment. In Canada, the S&P/TSX Composite declined as weakness in the materials, financials and technology sectors more than offset gains in the energy sector. After moving higher early in the day, longer-term bond yields finished little changed, with the 10-year Government of Canada yield closing around 3.7%. South of the border, the 10-year U.S. Treasury yield closed at 4.7%, while the 30-year yield finished around 5.28%. Despite pulling back over the course of the day, 10-year government bond yields in both Canada and the U.S. remain near their year-to-date highs. From a market-leadership perspective, materials were a notable laggard in Canada, amid a pullback in precious-metals prices. The S&P 500 technology sector also underperformed, with weakness in semiconductor stocks weighing on the sector and contributing to a 1.3% decline in the Nasdaq. Meanwhile, energy outperformed in both markets, supported by a modest rise in oil prices and ongoing uncertainty about developments in the Middle East. Defensive sectors of the S&P 500, including health care and consumer staples, also outperformed, reflecting a more defensive posture across markets on Tuesday. On the trade front, the U.S. is scheduled to impose a 50% levy on roughly $20 billion of Canadian goods on Wednesday morning. However, negotiations are reportedly ongoing, with Prime Minister Mark Carney and U.S. President Donald Trump expected to speak again Tuesday ahead of the deadline.
U.S. Treasury yields edge higher, weighing on sentiment – Despite a modest decline today, U.S. Treasury yields have moved modestly higher this week, particularly at longer maturities, with the 10-year Treasury yield trading around 4.71% and the 30-year yield near its highest level since 2007, at 5.28%. There has been limited incremental economic news to explain the move higher in yields, particularly because the move higher has followed encouraging U.S. inflation data and a repricing of Fed expectations toward keeping rates on hold in September. Rather, markets seem to be responding to several factors that are placing upward pressure on yields. First, the Securities Industry and Financial Markets Association (SIFMA) reported that, through July, U.S. investment-grade corporate bond issuance was nearly 30% higher than during the same period last year. In our view, elevated investment-grade bond supply could be contributing to the move higher in yields. Another factor likely contributing to higher yields is ongoing uncertainty in the Middle East, which has pushed WTI crude oil prices back above $80 per barrel. Additionally, we think U.S. fiscal concerns may be placing upward pressure on longer-maturity yields after the U.S. recorded its largest monthly budget deficit since March 2021 in July. In the near term, we expect these factors, along with a generally healthy economic backdrop, to keep longer-term yields elevated. We expect the 10-year U.S. Treasury yield to remain within a range of 4.5% to 5.0% over the remainder of the year.
Retail earnings in focus – Retail earnings are in focus Tuesday, with investors digesting results from home-improvement retailer Home Depot, which reported better-than-expected earnings and sales for the quarter. Management noted broad-based demand across the business, with a 2.8% increase in average ticket size and customers’ continued willingness to take on smaller projects helping drive the better-than-expected results. Additionally, management reaffirmed its full-year guidance, highlighting, in our view, cautious optimism about consumer spending trends. Consumer spending trends should remain in focus, with Lowe’s, TJX, Ross Stores, and Walmart scheduled to report later this week. Despite a soft July retail-sales report last Friday, we expect household spending to remain steady over the remainder of the year. While the benefits of U.S. tax refunds earlier this year are likely behind us and elevated oil prices could continue to weigh on discretionary spending, stable labour-market conditions and healthy household balance sheets should continue to support spending through year-end, in our view.

Brock Weimer, CFA;
Investment Strategy

^{Source for all data: FactSet.}

Stocks close mostly lower to begin the week – North American equity markets closed mostly lower on Monday, following domestic inflation data for July that showed consumer prices rose by 3% on an annual basis, up from the prior month's reading of 2.8%. Overseas, European markets were little changed, while Asian markets were mostly higher overnight despite weaker-than-expected second-quarter GDP growth in Japan. Government bond yields finished the day higher, with the 10-year GoC yield rising to 3.72%. South of the border, the 10-year U.S. Treasury yield finished just above the 4.7% mark, while the 30-year yield rose to 5.31%, the highest since 2007. In commodity markets, oil prices also finished higher, with West Texas Intermediate crude trading around $84 per barrel as investors continued to monitor developments in the Middle East.
Headline inflation rises in July, but core measures remain contained – The domestic headline consumer price index (CPI) rose 3.0% year-over-year in July, accelerating from a 2.8% increase in June. Higher gasoline prices were a key contributor, rising 25.7% from a year earlier as conflict in the Middle East placed upward pressure on energy prices. Prices for travel tours and air transportation also increased, perhaps reflecting a temporary boost in travel demand related to the World Cup. In our view, these travel-related increases are unlikely to be repeated to the same extent in the coming months. Beneath the headline reading, inflation pressures appeared relatively contained. The Bank of Canada’s preferred measures of core inflation, CPI-median and CPI-trim, rose 2.0% and 1.9%, respectively, from a year earlier. In our view, both measures remaining near the midpoint of the Bank’s 1% to 3% inflation-target range suggests that underlying inflation pressures remain manageable. With underlying inflation contained, we expect the Bank of Canada to remain on hold in the near term.
U.S. bond yields remain near year-to-date highs despite tame July inflation – Last week brought encouraging news on the U.S. inflation front, with both headline and core CPI moderating and wholesale prices trending lower. In response, futures markets shifted from pricing in a rate hike at the Federal Reserve’s September meeting to favouring a hold. Bond yields, however, have traded higher, with the 10-year U.S. Treasury yield above 4.7% today and the 30-year yield rising to 5.31%, the highest since 2007. In our view, several factors are likely contributing to the upward pressure in longer-term yields. First, issuance of U.S. investment-grade corporate bonds has increased meaningfully this year. Bloomberg has noted that issuance is more than 30% higher on a year-over-year basis, suggesting that greater supply may also be contributing to the elevated yield environment. Second, oil prices continued to move higher amid uncertainty surrounding the path forward in the Middle East, adding to inflation concerns and potentially placing further upward pressure on bond yields. Finally, ongoing U.S. fiscal concerns have likely placed upward pressure on yields, particularly at longer maturities. The U.S. reported a $432 billion budget deficit for July, the largest monthly shortfall since March 2021. Against this backdrop, we expect the 10-year Treasury yield to trade within a range of 4.5% to 5.0% over the remainder of the year. Looking beyond the near term, starting yields have historically had a strong relationship with future returns for investment-grade bonds over a multi-year time horizon. Geopolitical uncertainty, elevated issuance, and fiscal concerns may continue to create challenges, but today’s higher yields could bode well for U.S. fixed income returns over the longer run, in our view.

Brock Weimer, CFA;
Investment Strategy

^{Source for all data: FactSet.}

Stocks close slightly lower, with U.S. household spending in focus – North American equity markets closed slightly lower on Friday following softer-than-expected U.S. economic data. U.S. headline retail sales fell 0.6% in July, compared with expectations for a 0.1% gain. Meanwhile, the preliminary University of Michigan Consumer Sentiment Index declined to 51.0 in August from 55.2 in July, remaining well below its longer-term average of around 84. Despite Friday’s decline, the TSX and S&P 500 each finished modestly higher for the week. Bond yields also moved higher, particularly at the long end of the curve. The 10-year GoC yield climbed to just below 3.7%, while the 10-year U.S. Treasury yield rose to approximately 4.69%. The rise in longer-term yields despite softer economic data may reflect several factors, including ongoing uncertainty surrounding developments in the Middle East and a modest increase in U.S. consumers’ year-ahead inflation expectations. The University of Michigan survey showed that year-ahead inflation expectations edged up to 4.3% in August from 4.2% in July, while five- to 10-year expectations held steady at 3.3%.
U.S. consumer spending softens in July – U.S. headline retail sales fell 0.6% in July, missing expectations for a 0.1% gain and posting their first monthly decline since January. Despite the monthly pullback, sales remained 5.0% higher compared to this time last year. Looking beneath the headline, declines at motor vehicle and parts dealers and gasoline stations weighed on July sales. However, weakness extended beyond these categories, as retail sales excluding motor vehicles, parts, and gasoline also declined 0.2% for the month. A 2.2% decline in sales at nonstore retailers, a category that includes online shopping, contributed to the broader weakness. However, the drop may partly reflect a timing distortion, as Amazon moved Prime Day from its traditional July window to June 23–26 this year, potentially pulling some purchases forward into June. In our view, elevated tax refunds stemming from legislation enacted in 2025 likely supported U.S. consumers during the first half of the year. Combined with relatively stable labour-market conditions and a low pace of layoffs, this support likely helped offset the pressure that higher energy prices placed on household finances. With the boost from tax refunds likely behind us, a more moderate pace of spending appears reasonable to us over the second half of the year. Nevertheless, we expect U.S. consumer spending to remain stable through year-end, supported by healthy household balance sheets and low unemployment.
Contained U.S. inflation supports a Fed pause in September – Markets breathed a sigh of relief this week as July’s consumer price index (CPI) and producer price index (PPI) inflation reports came in largely in line with, or below, expectations. On the consumer side, headline CPI rose a modest 0.1% for the month and eased to 3.4% on a year-over-year basis. Core CPI increased 0.2% in July and 2.5% from a year earlier. Over the three months through July, core CPI rose at a 1.6% annualized rate, marking the first three-month reading below the Fed’s 2% inflation target this year. The producer price report provided further evidence of moderating price pressures. Headline PPI was unchanged in July, while PPI excluding food and energy rose 0.2%, below expectations. Before last week's payroll report, markets had priced in roughly a 60% probability of a 0.25-percentage-point rate increase at the Fed’s September meeting. Following this week’s inflation data, futures markets are now tilted toward a pause, with the probability of a rate increase falling to approximately 30%. Barring an upside surprise in the August inflation data or renewed energy-price pressures, we believe the recent string of moderate inflation readings support the Fed holding rates steady in September.

Brock Weimer, CFA;
Investment Strategy

^{Source for all data: FactSet.}

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The Investment Policy Committee (IPC) defines and upholds Edward Jones investment philosophy, which is grounded in the principles of quality, diversification and a long-term focus.

The IPC meets regularly to talk about the markets, the economy and the current environment, propose new policies and review existing guidance — all with your financial needs at the center.

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