Market Update August 2025
The past month saw notable activity across equity, commodity, and currency markets. Here’s a look at what happened in July and how we’ve positioned portfolios in response.
How Did the Markets Perform in July?
Markets posted solid gains in July despite ongoing trade disputes, geopolitical tensions, and mixed economic data.
S&P/TSX: ↑1.7% - Strength came from Communication Services, Technology, and Real Estate, each up over 4.5%.
S&P 500: ↑2.2% - Driven by strong technology earnings. Technology and Utilities gained around 5% each.
Oil: ↑6.1% - The second-largest monthly gain this year, fueled by the Iran–Israel conflict and U.S. retaliation.
Gold: Flat - Investors were split between safe-haven buying and profit-taking.
Interest Rates, Inflation, and Employment
Interest Rates:
Bank of Canada: Held rates at 2.75% for the third consecutive meeting (next decision: September 17th). Markets anticipate a possible year-end cut to 2.25%.
U.S. Federal Reserve: Held rates in July. While a cut remains possible later in the year, Fed Chair Powell continues to prioritize inflation control.
Inflation:
Canada: ↑1.9% in June (from 1.7% in May).
U.S.: ↑2.7% in June (from 2.4% in May). Core CPI up 2.9% year-over-year.
Unemployment:
Canada: ↓ to 6.9% (first decline since January 2025).
U.S.: ↑ to 4.2% from 4.1%.
Portfolio Adjustments in July
We made two key allocation changes last month to position for potential growth while maintaining a strong liquidity buffer:
July 7 - Reduced fixed income by 2%, adding 1% to Canadian equities and 1% to U.S. equities.
July 23 - Reduced fixed income by 6%, adding 2% to cash, 2% to Canadian equities, and 2% to U.S. equities.
Looking Ahead
We remain neutral with a tilt toward solid equity assets. If market stability continues, we may reduce cash/fixed income by another 2–3% and reallocate into equities or gold as a hedge.
While political headlines and tariff negotiations will likely continue to dominate the news cycle, our focus stays on fundamentals: earnings strength, economic resilience, and prudent risk management.
Bottom Line
Your portfolio continues to protect your capital, provide consistent income, and remain positioned for opportunity. As conditions evolve, we will continue to make adjustments to ensure your plan stays on track.
If you’d like to discuss these updates or what they may mean for your portfolio, please get in touch. We’re always here for you.