September 13, 2026
Canadian investors had plenty to digest this week, but I think three developments mattered more than everything else: oil moving back above US$100, inflation pushing interest-rate expectations higher again, and another escalation in the Canada–U.S. trade dispute. The S&P/TSX Composite finished Friday at 35,697.49, recovering 0.5% on the day. That rebound wasn’t enough to save the week. The TSX fell 2.2%, its fourth consecutive weekly decline and its worst week since March. To me, the important part isn’t simply that the TSX had a rough week. It’s understanding what’s putting pressure on it.
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Oil Is Back Above US$100 — And That’s Complicated for Canada
Oil was probably the biggest market story of the week. U.S. crude settled Friday at US$100.05 per barrel, after briefly pushing above US$102 on Thursday as conflict and shipping disruptions in the Middle East raised concerns about global supply. Brent finished the week around US$104 and gained more than 8% over the week. The situation became even more important over the weekend. Reuters reported Sunday that damage to a major Saudi pipeline could threaten as much as 4% of global oil supply if operations aren’t restored quickly.
For Canadian investors, high oil prices are one of those developments where both sides matter. Canadian energy producers can obviously benefit from stronger commodity prices. Higher realized oil prices can support revenue, free cash flow, dividends, share buybacks and potentially stronger balance sheets across parts of the Canadian energy sector. But that’s only one side of the story.
Oil above US$100 also means more expensive gasoline, diesel, air travel and transportation. Those costs eventually work their way through the economy. That can keep inflation elevated and make central banks more cautious about lowering interest rates — or even put additional rate increases back on the table. That’s why I wouldn’t automatically look at US$100 oil and think, “Great for the TSX.” It may be great for certain Canadian energy companies while simultaneously creating problems for consumers, interest-rate-sensitive companies and equity valuations more broadly.
Interest Rates Are Back in the Conversation
The second major development came from the United States. U.S. consumer prices increased 0.4% in August, while annual inflation remained at 3.4%. Core CPI increased 0.3% for the month, slightly hotter than economists expected. By Friday, markets were pricing roughly an 85%–87% probability of a 25-basis-point Federal Reserve rate increase at this week’s meeting. That’s a major change in tone.
For a long-term Canadian investor, the Fed may sound like an American issue, but U.S. rates influence global bond yields, currencies, valuations and financial conditions. Canadian REITs, utilities, telecoms, technology companies and other rate-sensitive investments can all feel the effects. We saw some of that pressure on Thursday. The TSX dropped 1.1% to its lowest closing level since July 31 as bond yields climbed and investors became more concerned about inflation. Real estate fell 1.8% that day while materials dropped 3.6%.
Friday’s rebound was encouraging, particularly with Canadian technology stocks jumping 3.6%, but one strong day doesn’t really change the broader issue. In my opinion, investors need to get comfortable with the possibility that interest rates may stay higher for longer than markets previously hoped. That doesn’t mean selling good businesses because rates moved. It means being more selective about valuations and remembering that the price you pay still matters.
Canada–U.S. Trade Tensions Escalated Again
The third development I wouldn’t ignore is trade. Canada’s retaliatory tariffs on approximately $20 billion of U.S. goods took effect September 8. The United States responded by announcing restrictions covering Canadian alcohol, motorcycles and dairy products that are scheduled to take effect September 29. There will probably continue to be a lot of political noise around this story.
What matters to me as an investor is what eventually shows up in corporate results. Do companies start facing higher input costs? Do Canadian exporters lose access to customers? Do supply chains move? Do businesses delay capital spending because they don’t know what trade rules will look like six months from now?
Those are the things worth watching. There is potentially another side to this story as well. Canada is clearly accelerating efforts to attract international capital and diversify investment beyond its traditional dependence on the United States. That brings us directly to one of the biggest events coming this week.
My Take Heading Into the Week
What caught my attention this week is how interconnected everything has become. Oil isn’t just an energy story anymore. It’s an inflation story. Inflation isn’t just a consumer-price story. It’s an interest-rate story. Interest rates aren’t just a mortgage story. They affect stock valuations, currencies, borrowing costs and business investment. And trade tensions aren’t simply political headlines. If they last long enough, they eventually affect corporate margins and investment decisions.
That’s why I don’t think the answer is trying to predict where the TSX will be next Friday. For me, it’s about separating companies that are actually becoming better businesses from companies whose share prices were simply benefiting from favourable market conditions. Volatility can create opportunities, but only if I’m comfortable owning the business after the volatility disappears.
What I’m Watching This Week
Canadian inflation — Monday, September 14
Statistics Canada releases August CPI on Monday. Canada’s annual inflation rate was 3.0% in July, although underlying core measures remained much closer to 2%. The Bank of Canada held its policy rate at 2.25% on September 2 and specifically noted that risks to inflation had increased because of energy prices and tariffs. Monday’s report could therefore have a meaningful impact on expectations heading toward the Bank’s next decision on October 28.
Canada Investment Summit — Monday and Tuesday
The first Canada Investment Summit takes place in Toronto on September 14 and 15. The federal government is trying to catalyse $1 trillion in total Canadian investment over five years, with attention on sectors including energy, critical minerals, infrastructure, artificial intelligence and defence. I’m less interested in the size of the headline target than what actually comes out of the summit. If Canada can turn investor interest into real projects, capital spending and productive assets, that would matter far more to long-term investors than another announcement.
Federal Reserve — Wednesday, September 16
The Federal Reserve concludes its two-day meeting Wednesday. After the latest inflation numbers, markets are leaning heavily toward another rate increase. I’ll be watching the decision, but probably even more importantly, what the Fed says about inflation and the path of rates from here.
Oil and the Middle East
This may ultimately overshadow everything else. With crude already above US$100 and fresh concerns surrounding Saudi infrastructure and global shipping routes, energy prices could remain an important driver of inflation expectations, bond yields and Canadian energy stocks. From a long-term investor’s perspective, I’m not trying to predict the next move in oil. I’m watching whether these higher prices become temporary market volatility or something persistent enough to change the outlook for inflation, interest rates and corporate earnings. That’s the distinction I think matters heading into the new week.
This article represents my personal opinion and is for educational purposes only. It is not financial advice.
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