TSX Fell 0.87% to Its Lowest Close Since July as the 10-Year Treasury Yield Passed 5.2%

Rising U.S. Treasury yields lowered equity valuations across North American markets, and a gold selloff added to losses on the Canadian index. Photo: iStock.

Market

TSX Fell 0.87% to Its Lowest Close Since July as the 10-Year Treasury Yield Passed 5.2%

Sep 29, 2026 6 min The Market Desk

The Brief

The S&P/TSX Composite fell 0.87% to 35,489.86 on Monday, its lowest close since July, according to Investing.com.
The S&P 500 lost 0.77% to 7,683.93, and the Nasdaq Composite dropped 0.92%, according to Investing.com and TheStreet.
The U.S. 10-year Treasury yield rose to about 5.2%, the highest since 2007, according to Yahoo Finance.
The Canadian dollar slipped to 70.58 cents US, from 70.70 cents on Friday, according to The Canadian Press.
PCE inflation on Wednesday and payrolls on Friday come before a Fed decision on October 28 that markets price at roughly 70% odds of a hike.

The S&P/TSX Composite fell 0.87% to 35,489.86 on Monday, its lowest close since July, as a selloff in gold pulled down the materials sector. The index is now 2.3% below its September 22 close of 36,335.61 and 3.1% below its September 3 close of 36,633.12, according to Investing.com data. Trading Economics puts the one-month decline at 2.15%, although the index remains 18.41% higher than a year ago.

The decline was not a Canadian story alone. The S&P 500 lost 0.77% to 7,683.93, the Nasdaq Composite fell 0.92% to 26,820.38 and the Dow Jones Industrial Average slipped 0.67% to 51,481.51, according to TheStreet. The common driver was the bond market.

Why a 5.2% Treasury Yield Outweighed Higher Oil

The U.S. 10-year Treasury yield rose to between 5.24% and 5.25%, the highest since 2007, and the 30-year yield climbed to between 5.56% and 5.57%, the highest since 2004, according to Yahoo Finance. The 2-year yield advanced to 4.93%. Higher yields lift the rate used to discount future corporate earnings, so equity valuations fall even when the earnings outlook has not changed.

Oil is the input that turned the move into a stock story. WTI touched US$96.53 during the session after President Donald Trump rejected Iran seven-day plan to reopen the Strait of Hormuz, and it closed at US$93.18, according to Investing.com. Energy was one of only three S&P 500 sectors to rise, along with health care and consumer staples. Consumer discretionary lost 1.43%, communication services lost 1.56% and financials lost 1.14%, according to TheStreet.

What the Canadian Index Is Carrying

The Canadian Press reported that the TSX was weighed down by base metals, technology and telecom stocks, while petroleum assets gained as crude rose. The Canadian dollar closed at 70.58 cents US, down from 70.70 cents on Friday.

The index has closed between 35,490 and 36,633 since August 31, and Monday set the low of that range. The path below shows the three dates that shaped it: the Federal Reserve rate increase on September 16, the 1.6% drop on September 23, and Monday.

S&P/TSX COMPOSITE 35,490 ▼ 2.2% SINCE AUG 31 DAILY | AUG 31 TO SEP 28, 2026

Source: Investing.com, S&P/TSX Composite historical data, Aug 31 to Sep 28, 2026. | hdq.ca

Daily closes. The Labour Day session of September 7 is excluded. The index closed at 35,490 on September 28, 2.3% below its September 22 close of 36,336.

The Calendar That Decides the Next Move

Yahoo Finance flagged a data-heavy week: the PCE inflation report on Wednesday and September employment figures on Friday. Markets are pricing roughly 70% odds of a second Federal Reserve hike at the October 28 meeting, according to CME FedWatch data cited by Trading Economics. A hotter PCE reading or a strong payrolls number would push that probability higher and keep pressure on the long end of the curve.

The Canadian consequence runs through two channels. A higher U.S. 10-year yield raises the hurdle for every dividend and income stock on the TSX, and gold and base metals have been the first casualties of the rate response. Energy is the offset, and it holds only while oil stays near US$93 or higher. Diplomatic progress in the Iran talks would lower oil and inflation, but it would also remove the one sector that rose on Monday.

Sources

Investing.com, S&P/TSX Composite Historical Data and S&P 500 Historical Data, Aug 31 to Sep 28, 2026; Investing.com, TSX falls to lowest close since July as gold selloff hammers materials, Sep 28, 2026; TheStreet, Stock Market Today (Sept. 28, 2026), Sep 28, 2026; Yahoo Finance, Stock market today: Dow, S&P 500, Nasdaq fall as Treasury yields continue to climb, Sep 28, 2026; The Canadian Press via CP24, S&P/TSX composite falls more than 300 points, Sep 28, 2026; Trading Economics, Canada Stock Market Index (TSX), Sep 29, 2026, and CME FedWatch data cited by Trading Economics; CNBC, Fed rate decision, Sep 16, 2026.

Educational content only. This article is published for informational and professional development purposes. It does not constitute investment advice, financial planning advice, or a recommendation to buy or sell any security. Canadian advisors should apply their own professional judgment. Full disclaimer.

Advisor Toolkits — Sep 29, 2026

🛡️ Respond ▼

What They're Feeling

Clients see the TSX at its lowest close since July and read it as the start of something larger. Retirees who hold dividend stocks feel a second worry, because a 5.2% Treasury yield makes safe income look competitive with their equity income. Clients with gold or materials exposure feel the loss most directly, and those who bought gold as protection feel it was supposed to behave differently.

What to Say

The Canadian market fell just under 1 percent on Monday and closed at its lowest level since July. That is a modest move in context: the index is about 2 percent below its recent high and still up more than 18 percent from a year ago. The cause was not a Canadian problem. U.S. government bond yields rose above 5 percent, the highest in almost twenty years, and that lowers what investors will pay for stocks everywhere. Gold and base metals sold off on the same pressure, which is why materials fell. The next events that matter are U.S. inflation data on Wednesday, the jobs report on Friday and the Federal Reserve decision on October 28. Your plan was built for periods like this. I would like to review your holdings that are most sensitive to interest rates and confirm the plan is still right for you.

Who's Affected

High impact: Clients concentrated in gold and materials, retirees relying on dividend stocks and preferred shares, and clients holding long-duration bonds bought before yields rose.

Mixed impact: Balanced-portfolio clients, who lost on equities but earn a higher yield on new bond and GIC purchases.

Potential benefit: Clients holding cash who are ready to buy bonds at the highest yields in years, and clients with Canadian energy exposure.

Action Checklist

Identify clients whose portfolios hold more than 15% in materials or gold.

List income-focused clients who hold dividend stocks and preferred shares and review the yield gap to bonds.

Review the duration of bond holdings for clients who bought before yields rose.

Identify clients with idle cash who could add bonds or GICs at current yields.

Mark Wednesday for PCE inflation, Friday for payrolls and October 28 for the Fed decision.

Document every conversation about market losses in the client file.

Follow-Up Email Template

Subject: Monday market move and what it means for your plan

Hi [Client Name],

Thank you for speaking with me today. Here is a short summary.

The Canadian market fell 0.87% on Monday and closed at its lowest level since July. The main cause was a rise in U.S. government bond yields above 5%, the highest since 2007, which lowers what investors will pay for stocks. Gold and base metals fell on the same pressure. The index remains more than 18% higher than a year ago.

I would like to review the parts of your portfolio most sensitive to interest rates and confirm the plan still fits your goals. I have set aside time on [Day and Time] for that review.

[Your Name]

This communication is for educational purposes only and does not constitute personalized investment advice.

🎯 Prospect ▼

Client Profiles to Target

Income investors with all-equity dividend portfolios: a 5.2% Treasury yield changes the comparison they made when they built the portfolio.

Investors holding cash on the sidelines: yields at 20-year highs are the reason many of them waited, and the decision is now in front of them.

DIY investors holding gold and mining stocks: Monday showed that these positions can fall with the market and not against it.

Opening Line

The Canadian market closed at its lowest level since July on Monday, and the cause was a bond market, not a Canadian company. U.S. government yields are above 5 percent for the first time in almost twenty years, and I am calling people to walk through what that means for savings and investments.

Value Proposition

When yields reach a 20-year high, both risk and opportunity change at once. Stocks reprice lower, and new bond and GIC purchases earn more than at any time since 2007.

The advisor compares the return on safer assets with the income from equities, measures the interest rate risk in the existing bond holdings, and sets a plan for the Federal Reserve decision on October 28. That is the analysis an investor cannot get from a headline about the index.

Discovery Questions

1. How much of your portfolio is in dividend stocks, and how much of your income depends on them?

2. Have you compared that dividend income with current bond and GIC yields?

3. Do you hold gold or mining stocks, and what role were they meant to play?

4. How much cash are you holding, and what would make you invest it?

5. What would you do if the market fell another 5% after the October 28 decision?

6. Who reviews your interest rate exposure when yields move?

Prospecting Email Template

Subject: U.S. yields hit 5.2%: what it means for your savings and stocks

Hi [Prospect Name],

The Canadian market fell to its lowest close since July on Monday, and the cause was a rise in U.S. government bond yields to their highest level since 2007. That changes the return available on safer investments, and it changes what stocks are worth.

I would be glad to walk through how the comparison looks for your portfolio, in fifteen minutes and with no obligation. Would [Day] or [Day] work?

[Your Name]

This communication is for educational purposes only and does not constitute personalized investment advice.