TSX Recovers Monday Rate Repricing as All Six Big Banks Rally, Still 2% Below August Record

Bay Street towers in the Toronto financial district as the S&P/TSX Composite recovers its Monday decline led by the big banks. Photo: iStock.

Market

TSX Recovers Monday Rate Repricing as All Six Big Banks Rally, Still 2% Below August Record

Oct 22, 2026 5 min The Market Desk

The Brief

The S&P/TSX Composite closed at 36,324.99 on October 21, up 217.03 points or 0.60%, its highest close since September 22 and above the October 16 close of 36,176.55.
All six big banks advanced, led by TD at 1.98% and National Bank at 1.90%, and financials gained 1.28% as industrials rose 1.12% and consumer discretionary fell 1.08%.
Energy was nearly flat at 0.06% even with Brent near $110, and breadth was positive at 1,505 advancers to 702 decliners on 411.15 million shares.
The index sits about 2.0% below its August record of 37,069.11 and 3.7% above the October 7 low of 35,041.86.
The Bank of Canada decides on October 28 and markets lean toward a hike, with the federal budget due on November 5 and Israel voting on October 27.

The S&P/TSX Composite rose 217.03 points, or 0.60%, to 36,324.99 on October 21, its second straight gain. On Monday October 19 it fell 0.69% to 35,928.63 as Bank of Canada hike odds jumped, and the close is now above the 36,176.55 level it left on Friday October 16.

The recovery is narrower than the headline suggests. Banks and industrials did the work, energy contributed almost nothing, and the index is still about 2.0% below its August record of 37,069.11.

Banks Led the Session

All six big banks advanced. TD led at 1.98%, followed by National Bank at 1.90%, BMO at 1.66%, Scotiabank at 1.63%, CIBC at 1.40% and RBC at 1.23%. Financials gained 1.28% as a sector and industrials gained 1.12%. Manulife rose 1.57% to $63.51.

Trading Economics attributed the move to eased pressure on credit-sensitive stocks and a pause in the oil rally. A separate report tied the industrial and financial strength to a $9 billion support package for the steel and auto industries announced by Canada and Ontario. The package is reported by one source and its size has not been confirmed elsewhere.

Energy Sat Out

Energy was nearly flat at 0.06% even as crude stayed volatile. Trading Economics quotes showed WTI near $99 and Brent near $111, up 1.7% and 2.5% respectively on the day, while other reports put Brent at about $110. Consumer discretionary fell 1.08% and telecommunications fell 0.95%. Magna International fell 4.1% after two analysts cut price targets.

Breadth was positive, with 1,505 advancers against 702 decliners on volume of 411.15 million shares, about 1.8% above Tuesday. A rally led by banks with energy flat has a different character from one led by oil, because it does not depend on the war premium.

S&P/TSX COMPOSITE DAILY CLOSE 2.0% BELOW RECORD ▲ 0.60% ON OCT 21 DAILY CLOSES | SEP 16 TO OCT 21, 2026

Source: YCharts, S&P/TSX Composite daily closing levels; Trading Economics for the August record. | hdq.ca

Daily closing levels of the S&P/TSX Composite from September 16 to October 21, 2026. The dashed horizontal line marks the August record close of 37,069.11, and the vertical line marks October 19, when the index fell 0.69%.

Where the Index Sits in the Range

The index is 3.7% above the October 7 closing low of 35,041.86, set after a 1.7% decline that day, and below the September 22 close of 36,335.61. In the five weeks shown, it has ranged between those two levels, with the largest daily falls 1.7% on October 7 and 1.6% on September 23, and the largest gain 1.55% on October 15.

Wall Street also rose. The Dow gained 0.69% to 52,856.09, the S&P 500 gained 0.58% to 7,757.17 and the Nasdaq Composite gained 1.05% to 26,702.76. One report noted that new 52-week lows still outnumbered new highs on both the NYSE and Nasdaq, which suggests the US recovery is also incomplete.

The Week Ahead

The Bank of Canada decides on October 28 with a Monetary Policy Report, and markets lean toward a quarter-point increase even though a Bloomberg survey of economists points to a hold. Israel holds its election on October 27, US midterms follow on November 3, and the federal budget is due on November 5. The CFIB business barometer is released on October 22 at 8:00 a.m. ET.

The index has now recovered the Monday drop that came with the jump in hike odds. If the Bank raises rates on October 28 with core inflation below target, banks and rate-sensitive sectors will reprice again, and the dependence on one decision is the risk in this rally.

Sources

YCharts, S&P/TSX Composite Index daily closing levels, September 16 to October 21, 2026; The Canadian Vanguard stock market report, October 21, 2026; Ad-Hoc-News, S&P/TSX Composite closes up 217 points as TD Bank leads, October 21, 2026; Trading Economics, Canada stock market, October 21 to 22, 2026, for the August record and crude quotes; Bousso, Reuters column via BOE Report, October 22, 2026, for Brent near $110.

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 22, 2026

🛡️ Respond ▼

What They're Feeling

Clients see the index back above 36,000 and wonder whether the worry is over, while the news still carries war and rate headlines. Some feel they missed the rebound after the Monday drop. Others, holding bank stocks, are pleased with the gain but anxious about the Bank of Canada decision next week. Most want to know whether to do anything.

What to Say

The Canadian market rose 0.6 percent yesterday and has recovered the Monday decline, led by the big banks, which all rose. It is still about 2 percent below its August high. That tells me the market is calm for now, not that the risks have gone. The Bank of Canada decides on October 28, there are elections in Israel and the United States in the next two weeks, and oil is near 110 dollars. I would not change your plan because of one good day, and I would not have changed it after the bad one on Monday. What I want to confirm is that your portfolio is not too reliant on any one of these outcomes, particularly bank stocks and energy. Let us look at your allocation and make sure it still matches your goals and time horizon.

Who's Affected

High impact: Clients whose Canadian equity holdings are concentrated in the six big banks or in financials, and anyone who planned to buy after the Monday decline and has not yet acted.

Mixed impact: Clients with balanced portfolios, who gained modestly, and clients with energy holdings, who saw almost no change on the day.

Potential benefit: Investors with cash waiting to be deployed, who can use a staged approach around the October 28 decision, and clients with a long horizon, for whom one session changes nothing.

Action Checklist

Calculate each client weighting in the six big banks and in financials as a share of the Canadian equity sleeve.

Flag any portfolio where banks plus energy exceed the concentration limit in the investment policy statement.

List clients with cash earmarked for deployment and agree a staged schedule that does not depend on October 28.

Prepare a one-page note showing the index range from September 16 to October 21 and the August record.

Calendar October 27, October 28, November 3 and November 5 for client communication.

Document each conversation, including any decision not to trade and the reason.

Follow-Up Email Template

Subject: The market this week and what it means for your plan

Hi [Client Name],

Thank you for speaking with me today. Here is a short summary of what we covered about the market this week.

The Canadian market rose on Wednesday and has recovered the Monday decline, led by the big banks. It is still about 2 percent below its August high. The Bank of Canada decides on October 28, and there are elections in Israel and the United States in the next two weeks. Your plan was built with periods like this in mind, and we agreed not to make changes in response to a single day.

I will review your bank and energy weightings and contact you after the Bank of Canada decision.

[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 Canadian bank stocks as core holdings: the sector just gained over 1% in a day and is exposed to the October 28 decision, and many have never measured the concentration.

Investors who sold or paused on Monday and are sitting in cash: the index recovered the loss within two sessions, and they have no plan for when to return.

Pre-retirees comparing a TSX near 36,000 against their retirement date: they want to know whether to wait for a new record, which sits 2% away.

Opening Line

The TSX bounced back this week, led by the banks, and is about 2 percent from its record, with a Bank of Canada decision on October 28. I am calling people who manage their own investments to ask how they are positioned for that decision.

Value Proposition

A market that moves 0.7% down on Monday and 0.6% up on Wednesday teaches self-directed investors to react to headlines. An advisor replaces that with a written plan for concentration, cash and timing that holds up through either outcome.

The week ahead has a decision, two elections and a budget. That calendar gives a natural reason to review exposure before the next move, not after it.

Discovery Questions

How much of your Canadian equity is in the big banks?

Did you change anything on Monday, and would you do the same again?

Do you have cash waiting to be invested, and what is the plan for it?

How would you feel if the market gave back this week gain after October 28?

What is your time horizon for this money?

Who do you talk to about positioning around events like this?

Prospecting Email Template

Subject: Bank stocks, the TSX and October 28

Hi [Prospect Name],

The Canadian market recovered the Monday drop this week, led by the big banks, and is about 2 percent below its August record. The Bank of Canada decides on October 28, and there are elections in Israel and the United States in the following days.

I am offering a short call to look at how much of your portfolio depends on the banks and on one rate decision, and what a sensible response would look like. Would 20 minutes this week work?

[Your Name]

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