Wall Street Is at Records and the TSX Is Not: The Canadian Index Is Down 3.16% Since August 26 While the Nasdaq Is Up 5.62%

Wall Street indices set record closes while Canadian equities remained below their August highs, a divergence shaped by rates, commodities and the October central bank calendar. Photo: iStock.

Market

Wall Street Is at Records and the TSX Is Not: The Canadian Index Is Down 3.16% Since August 26 While the Nasdaq Is Up 5.62%

Oct 7, 2026 5 min The Market Desk

The Brief

The S&P 500 and Nasdaq closed at records on Tuesday, at 7,818.93 and 27,599.79.
The TSX closed at 35,649.51, up 0.37%, and remains 3.5% below its record close of 36,957.60.
Since August 26 the TSX is down 3.16% while the S&P 500 is up 1.87% and the Nasdaq is up 5.62%.
The S&P/TSX 60 VIX hit a six-month low of 12.78, below the US VIX at 15.01.
This morning Brent is 102.28, up 1.7%, and S&P 500 futures are down 0.4%.

The S&P 500 closed Tuesday at a record 7,818.93, up 0.58%, and the Nasdaq Composite at a record 27,599.79, up 0.45%. The S&P/TSX Composite closed at 35,649.51, up 130.96 points or 0.37% for a third straight gain, and sits 3.5% below its record close of 36,957.60 from August 25.

Since the August 26 close, the TSX is down 3.16% while the S&P 500 is up 1.87% and the Nasdaq is up 5.62%, gaps of 5.0 and 8.8 percentage points. A Canadian portfolio holds the index that has missed the move.

Why the TSX Is Not Following Wall Street Higher

Tuesday leaders in Toronto were utilities, telecoms and Atco, rate-sensitive defensive names, with Shopify also higher. Advancers beat decliners 544 to 424. The US move had a different driver: the rally began after a soft September payrolls report on Friday, October 2 cut the odds of an October Fed hike, and AI enthusiasm buoyed the Nasdaq, according to Investing.com. The US 10-year yield eased to 5.269% from 5.311%.

Canadian rates moved the other way over the longer stretch. The Government of Canada five-year yield rose 35 basis points from 3.28% on August 24 to 3.63% on October 5, according to the Bank of Canada, and the Bank decides on October 28. The TSX fell 4.51% from its August 26 close to its October 1 close of 35,154.76 before the three-day bounce of 1.41%.

The TSX has lost 3.16% since August 26 while the S&P 500 and Nasdaq Composite have gained 1.87% and 5.62%, and the Canadian index was down 4.51% at its October 1 close before recovering.

TSX VS S&P 500 VS NASDAQ, REBASED 96.84 ▼ 3.16% SINCE AUG 26 DAILY CLOSE | AUG 26 TO OCT 6, 2026

Source: Yahoo Finance, S&P/TSX Composite, S&P 500 and Nasdaq Composite daily closes, rebased to the Aug 26, 2026 close. | hdq.ca

The rebasing closes on August 26 were 36,813.70 for the TSX, 7,675.70 for the S&P 500 and 26,130.20 for the Nasdaq Composite. The TSX record close is 36,957.60 on August 25 and its intraday record is 37,069.10 on August 26.

Implied Volatility Is Lower in Canada Than in the United States

The S&P/TSX 60 VIX fell 4.77% to 12.78 on Tuesday, a six-month low, according to BBN Times. The US VIX closed at 15.01, down 3.29%. Canadian options are pricing a calmer path than US options even though the Canadian index is the one 3.5% below its record.

The setup this morning is less calm. As of 7:26 am ET, S&P 500 futures were at 7,844.5, down 0.4% from Tuesday settlement of 7,874.0, and the VIX was indicated at 15.83, up 5.5%. Brent was at 102.28, up 1.7% from its 100.58 close, and WTI was at 90.35, up 1.0% from 89.44. Gold fell 1.0% to 4,145.0. The Canadian dollar was near 70.25 US cents, with USD/CAD at 1.4235.

What the Calendar Puts Next

Crude and gold pull the TSX in opposite directions this morning. Higher oil supports the Canadian energy group, and lower gold weighs on the gold producers in the materials group. The index needs a catalyst larger than either.

The first is the Canadian Labour Force Survey for September on Friday, October 9, at 8:30 am ET, followed by the September consumer price index on October 19. The Bank of Canada and the Federal Reserve both decide on October 28. Bank of America latest Global Fund Manager Survey named an AI bubble as the largest tail risk, at 45%, which is the risk attached to the index that is at a record.

Sources

Yahoo Finance, S&P/TSX Composite (^GSPTSE), S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) daily closes through Oct 6, 2026; Yahoo Finance, S&P 500 futures, Brent, WTI, gold, VIX, USD/CAD and US 10-year yield (as of about 7:26 am ET, Oct 7, 2026); BBN Times, TSX close report (Oct 6, 2026); Investing.com, market reports and CBOE Volatility Index historical data (Oct 6, 2026); Bank of Canada, Valet API, Government of Canada 5-year benchmark yield (Aug 24 and Oct 5, 2026); Bank of America, Global Fund Manager Survey (latest); YCharts, S&P/TSX Composite record high.

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 7, 2026

🛡️ Respond ▼

What They're Feeling

Clients with mostly Canadian holdings feel left behind as they watch US indices hit records. Clients with large US technology holdings feel confident, with a quiet worry that records invite a fall. Both groups are comparing their statements to the headlines and asking whether they are in the right place.

What to Say

I want to explain a gap you may have noticed. The S&P 500 and the Nasdaq closed at record highs on Tuesday, but the TSX is still about 3.5% below its own record. Since August 26, the TSX is down about 3%, while the S&P 500 is up about 2% and the Nasdaq is up almost 6%. That gap comes from what each index holds and from where rates are heading: Canadian bond yields have risen as the market prices a possible Bank of Canada hike on October 28. It does not tell us the Canadian market is broken or that the US market is safe. What matters is that your portfolio matches your plan. Let us look at how much sits in Canada and how much in US growth stocks, and make sure that mix is one you chose.

Who's Affected

High impact: Clients whose portfolios are mostly Canadian equities, who have lagged since August 26, and clients with large US technology positions, whose gains are concentrated in a record-setting sector.

Mixed impact: Balanced portfolios with a Canadian tilt, where Canadian lag and US gains partly offset each other.

Potential benefit: Clients with global diversification and written rebalancing rules, who can trim US strength and add to Canadian weakness by plan.

Action Checklist

Compare each client Canada and US equity weights with their target mix.

Flag clients whose US technology weight has grown beyond the policy limit.

Review rebalancing triggers for portfolios that have drifted since August 26.

Note October 9, October 19 and October 28 as client touchpoints.

Document each conversation and the client stated comfort with the current mix.

Follow-Up Email Template

Subject: Why US markets are at records while the TSX is not

Hi [Client Name],

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

The S&P 500 and Nasdaq closed at record highs on October 6, while the TSX closed at 35,649.51, about 3.5% below its record. Since August 26, the TSX is down 3.16% and the Nasdaq is up 5.62%. Higher Canadian bond yields and a possible Bank of Canada hike on October 28 are part of the explanation.

I will review how your portfolio is split between Canada and the United States and send you my notes.

[Your Name]

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

🎯 Prospect ▼

Client Profiles to Target

Self-directed investors with mostly Canadian holdings: they may be considering a move into US growth stocks after watching the gap open.

Self-directed investors already heavy in US technology: their gains are concentrated and they have no rebalancing rule.

Retirees nearing a withdrawal phase: record US indices raise the cost of a fall at the wrong time.

Opening Line

The S&P 500 and Nasdaq closed at records on Tuesday while the TSX is still 3.5% below its own, and I am calling a few investors about whether their mix of Canadian and US holdings is one they chose or one that drifted.

Value Proposition

When two markets diverge, the temptation is to chase the leader. A portfolio that drifts toward last month winner tends to carry more risk than its owner realizes, and a self-directed investor often has no written rule to stop that drift.

The value of an advisor here is a target mix and a rebalancing rule agreed before the next move, with the Bank of Canada and Federal Reserve decisions on October 28 as the natural review date.

Discovery Questions

What share of your portfolio is in Canadian stocks, and what share in US stocks?

Is that split a decision you made, or did it develop over time?

How much of your US exposure is in technology companies?

Do you have a written rule for when you rebalance?

Who do you call when one market moves far ahead of another?

Prospecting Email Template

Subject: US markets at records, Canada not: is your mix on purpose?

Hi [Prospect Name],

The S&P 500 and Nasdaq closed at records on October 6, while the TSX is still about 3.5% below its own record. Since August 26, the gap between the TSX and the Nasdaq is almost nine percentage points.

If you would like to see whether your Canada and US split is one you chose, I would be glad to review it with you in twenty minutes.

[Your Name]

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