The S&P/TSX Composite closed the holiday-shortened week at 36,176.55, up 1.44% from the October 9 close of 35,664.62 and within 2.4% of its 52-week high of 37,069.10. Toronto markets were shut Monday for Thanksgiving, so the gain came in four sessions: up 0.90%, down 1.11%, up 1.55% and up 0.11%. Two readings of the same week sit on top of that number, and they point in opposite directions.
The Index Traded the Price, Not the Strait
Wednesday was the only losing session, and it was also the day Kpler recorded flow through the Strait of Hormuz at roughly a tenth of the level it saw the previous Thursday, when nearly 23 million barrels moved. Analysts told the New York Post that more than 12 million barrels a day have transited in October overall, above the September average, despite a surge in Iranian attacks on shipping.
Thursday reversed the damage. The TSX gained 552.64 points on broad-based buying, the Canadian dollar firmed to 70.44 US cents from 70.11, December WTI settled up US$2.60 at US$96.50, and December gold added US$62.20 to US$4,170.10, according to The Canadian Press. Friday added energy: the S&P/TSX Capped Energy Index rose 2.77%, per Yahoo Finance, on a day the broad index moved 0.11%.
The mechanism matters more than the daily path. One collapsed flow day dented sentiment for a session. A sustained oil price near US$96 repaired it, because Toronto traded the price of the barrel and the ounce, not the count of tankers. Scarcity does not require a closed strait, only an unreliable one.
The TSX has traded in a band between 35,041.86 and 36,335.61 on a closing basis since September 10, and Friday finished 0.4% below the top of it.
The 35,000 level held on a closing basis through the window, with the lowest close at 35,041.86 on October 7. Toronto markets were closed October 12 for Thanksgiving.
Canada Priced Slack Underneath
The domestic data ran the other way. Statistics Canada reported on October 9 that the economy lost 68,000 jobs in September after losing 42,000 in August, and the unemployment rate rose to 6.5%. The rate in Ontario stands at 7.0%. Desjardins Economics wrote that the report leaves the Bank of Canada even less reason to leave the sidelines, with trade tension with the United States still weighing on growth.
Rate expectations moved with it. Wealth Professional reported that the odds of a quarter-point hike on October 28 fell to about 25% from roughly 40% within hours of the release. TD Economics senior economist Andrew Hencic put October at 27% and December at 88%, and CIBC senior economist Andrew Grantham reiterated his bank call for holds at both remaining 2026 meetings. Those probabilities are the starting condition for this week, and no new inflation data has tested them since.
Inflation explains why the market is divided. Headline CPI was 3.0% in August, but it was 2.4% excluding gasoline, and the core gauges the Bank watches ran at 1.9% for CPI-trim and 2.0% for CPI-median. Gasoline was up 22.8% on the year. The barrel that lifted the TSX this week is the same barrel holding headline inflation above target while core measures sit on it.
Where the Two Readings Meet
The October 28 decision arrives with a Monetary Policy Report and sits between a rising oil price and a softening labour market. The Federal Reserve raised its target range to 3.75% to 4.00% on September 16 in a unanimous 12 to 0 vote, and its median projection points to one more hike this year. That leaves 175 basis points between the top of the Fed range and the Bank of Canada overnight rate of 2.25%, which has held through seven consecutive decisions since October 2025.
Forecasters had begun to split. After the September 2 hold, UBS, Manulife, Oxford Economics and Bank of Nova Scotia moved toward an October hike, according to Canadian Mortgage Professional, while TD and CIBC kept their calls for patience. The jobs report then pulled the market back toward the patient camp.
Monday brings the first test. Statistics Canada releases September CPI at 8:30 a.m. Eastern, the last inflation reading before the decision. A headline near 3% with core measures near 2% would repeat August and support the case for waiting. A rise in the core measures would reopen the hike case the jobs data closed, with the index within 2.4% of its high and the currency near 70 cents. The week did not resolve the gap between a market pricing scarcity and an economy pricing slack. It set the date by which one of them has to give.