The TSX Fell 2.85% in September While the Main US Index Lost 0.45%: Gold, Materials and a US Yield Above 5% Explain the Gap

The TSX Composite lagged the main US index by 2.4 percentage points in September as gold and materials fell with a rising US Treasury yield. Photo: iStock.

Market

The TSX Fell 2.85% in September While the Main US Index Lost 0.45%: Gold, Materials and a US Yield Above 5% Explain the Gap

Oct 1, 2026 5 min The Market Desk

The Brief

The TSX closed at 35,235.87 on September 30, at the low of the day and its lowest close since July 31.
The index fell 2.85% in September against 0.45% for the S&P 500, but finished the quarter 1.09% higher.
Gold and materials explain the gap, with gold futures down 6.6% as the US 10-year yield rose from 4.75% to 5.26%.
First Quantum closed 15% lower on September 30, after a Panama commission recommended negotiating a Cobre Panama restart tied to closure.
Energy, materials and technology ETFs gained 10.7% to 17.5% in the quarter, while the financials ETF lost 3.6%.

The S&P/TSX Composite closed Wednesday at 35,235.87, down 0.63% on the day and at the low of the session, its lowest close since July 31. September produced a 2.85% decline for the index against 0.45% for the S&P 500, a gap of 2.4 percentage points that opens the fourth quarter. The quarter itself finished 1.09% higher, against 2.03% for the S&P 500.

Gold and Materials Carried the Decline

The shortfall against the American index came from resources. The iShares materials ETF (XMA) fell 7.6% in September and the gold ETF (XGD) fell 8.6%, while gold futures dropped 6.6%, from 4,481.50 dollars to 4,186.70. Copper futures were down only 0.5%. The move in gold coincided with a rise in the US 10-year Treasury yield from 4.75% on August 31 to 5.26% on September 29, a 51 basis point increase, according to Federal Reserve Bank of St. Louis data.

September 30 added a stock-specific loss. First Quantum Minerals closed 15% lower after a Panamanian government commission recommended opening negotiations to restart the Cobre Panama mine under an arrangement in which operations fund an orderly closure over time. The shares were down as much as 31% intraday, and the stock lost 17.1% over the month. Cobre Panama produced about 1% of global copper before its 2023 closure.

The index closed above its August 31 level on only three sessions in September, September 3, 4 and 22, and finished the month below its 10-day average of closes, which stood at 35,747.

S&P/TSX COMPOSITE: DAILY CANDLES AND VOLUME 35,235.87 ▼ 2.85% IN SEPTEMBER DAILY | AUG 17 TO SEP 30

Source: Yahoo Finance (S&P/TSX Composite daily open, high, low, close and volume); TMX Money (closes of Sep 15 to Sep 30); Investing.com (Aug 31 close). | hdq.ca

The shaded band marks the period since the August 31 close of 36,270.48. The dashed green line is the August 26 intraday high of 37,069.10, and the grey dashed line is the 10-day average of closes. Candle colour reflects the open-to-close direction of each session.

The Quarter Was Narrower Than the Headline

The 1.09% gain for the third quarter conceals a wide spread underneath it. The energy, materials and technology ETFs rose between 10.7% and 17.5% over the quarter, and the gold ETF rose 16.4%. The financials ETF (XFN) fell 3.6%, and Royal Bank of Canada shares lost 4.7%. In September alone, financials slipped 1.4% and technology gained 4.1%, so the index decline was a resource and gold story with the banks as a drag.

The largest daily losses came on September 23, when the index fell 1.61%, and September 1, when it fell 1.23%. The largest gain was 1.50% on September 3. Volume reached 628 million shares on September 18, more than twice a typical September session, and was 231 million on September 30.

What the Fourth Quarter Opens With

The quarterly baseline resets to the September 30 close of 35,235.87, with the August 26 high of 37,069.10 as the nearest marker above it, 5.2% higher. Three dates frame the next four weeks: September inflation on October 19, the Bank of Canada decision with its Monetary Policy Report on October 28, and the path of the US 10-year yield above 5%. The sector ETF figures in this article are price changes and exclude distributions.

Sources

Sources: Yahoo Finance, TSX Composite daily open, high, low, close and volume, August 17 to September 30, 2026, S and P 500 index closes, gold and copper futures, and iShares sector ETF prices (XMA, XGD, XEG, XFN, XIT) and company share prices; TMX Money, TSX Composite closes of September 15 to 30, 2026; Investing.com, TSX Composite close of August 31, 2026; Reuters via BNN Bloomberg, TSX close of June 30, 2026; Reuters via Investing.com, Panama commission recommendation on Cobre Panama and First Quantum share reaction, September 30, 2026; Federal Reserve Bank of St. Louis (FRED), US Treasury 10-year constant maturity yield, September 2026; CNBC, Federal Reserve decision of September 16, 2026. Returns computed by HDQ. Sector ETF returns are price changes and exclude distributions.

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 — Oct 1, 2026

🛡️ Respond ▼

What They're Feeling

Clients who check the TSX see a September loss and a quarter that barely moved, and those who hold gold funds, mining stocks or bank shares see larger declines on their statements. Some feel that holding Canadian equities has been a poor choice relative to the US market, and bond holders watching a US yield above 5% wonder about their fixed income.

What to Say

The TSX fell 2.85% in September, and the S&P 500 fell 0.45%. Most of that gap is gold and materials: gold dropped 6.6% as the US 10-year yield rose from 4.75% to over 5.25%, and one large copper miner fell 15% in a day on Panama news. For the full quarter the TSX is up 1.09%, but the gain came from energy, materials and technology while the banks lost ground. That is why your statement may look different from the index depending on what you hold. What I would like to do is check how much of your Canadian equity is in resources and banks, and make sure that mix still fits the plan.

Who's Affected

High impact: Clients with concentrated positions in gold miners, materials or First Quantum, and clients with large Canadian bank holdings.

Mixed impact: Clients in diversified Canadian equity funds, where energy and technology gains offset gold and bank losses. Bond holders, who face higher yields with falling prices on long-duration funds and better income on new purchases.

Potential benefit: Clients with cash to invest, for whom higher yields on short-term bonds and GICs are a larger source of return than a year ago.

Action Checklist

Identify clients with more than a set share of equity in gold, materials or a single miner.

Review Canadian bank and financials weights against target allocations.

Check the duration of bond funds against the move in the US 10-year yield above 5%.

Prepare a short note on why the TSX and the S&P 500 diverged in September.

Calendar October 19 for September CPI and October 28 for the Bank of Canada decision.

Follow-Up Email Template

Subject: Why the TSX lagged in September

Hi [Client Name],

Thank you for speaking with me today. I wanted to summarize what we covered.

The TSX fell 2.85% in September, against 0.45% for the S&P 500, mainly because of gold and materials as the US 10-year yield rose above 5%. For the quarter, the TSX gained 1.09%, led by energy, materials and technology, while the banks declined.

I would like to review how much of your Canadian equity is in resources and banks and how your bond holdings are positioned. Please let me know a time this week that suits you.

[Your Name]

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

🎯 Prospect ▼

Client Profiles to Target

Self-directed holders of gold and mining stocks: gold futures fell 6.6% in September, the gold ETF fell 8.6%, and a single miner lost 15% in one session.

Investors who own a Canadian index fund and assume it is diversified: the quarterly gain came from energy, materials and technology, and the banks lost 3.6%.

Bond and GIC holders: the US 10-year yield has passed 5%, and their fixed income may not reflect it.

Opening Line

I am calling because the TSX fell 2.85% in September while the S&P 500 fell less than half a percent, and most of the gap was gold and mining stocks. Do you know how much of your Canadian equity sits in those sectors?

Value Proposition

An index figure hides its sources. The TSX gained 1.09% in the quarter, but energy and gold rose by more than 15% while financials fell, and a client holding the index inherits that mix without choosing it.

An advisor can show the sector exposure, set position limits for single stocks such as a miner with a binary regulatory outcome, and align bond duration with a rising yield environment.

Discovery Questions

How much of your portfolio is in gold, mining or single resource stocks?

What share of your Canadian equity is in the big banks?

How are your bonds and GICs positioned now that the US 10-year yield is above 5%?

Did September change how you feel about your Canadian holdings?

When did you last compare your holdings with the sector weights of the index?

Prospecting Email Template

Subject: The TSX lagged by 2.4 points in September: do you know why?

Hi [Prospect Name],

The TSX fell 2.85% in September, against 0.45% for the S&P 500, and most of the gap came from gold and materials as the US 10-year yield rose above 5%. The index still gained 1.09% for the quarter, but energy, materials and technology did the work while the banks fell.

If you hold a Canadian index fund or resource stocks, it is worth knowing which of those sectors drive your results. I am happy to walk through it in a 20-minute call.

[Your Name]

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