Canada Stock Market Weekly Recap (Dec. 1–6, 2025): TSX Holds Near Record as Jobs Surge and Banks Beat Expectations

Canada’s stock market just wrapped up a choppy but resilient week. The S&P/TSX Composite Index finished Friday, December 5, at 31,311.41, down about 0.2% for the week after briefly touching a fresh record high on Thursday. ^[1]

Despite the modest weekly decline, the big picture remains bullish: the TSX is up roughly 30% year‑to‑date and more than 25% over the past 12 months, making Canadian equities one of the stronger performers among developed markets in 2025. ^[2]

Below is a detailed, day‑by‑day and theme‑by‑theme breakdown of what moved the Canada stock market between December 1 and 6, 2025, and how strategists are thinking about 2026.

At a Glance: How the TSX Traded This Week

Weekly move: TSX down ~71 points (‑0.23%) from last Friday’s 31,382.78 to 31,311.41. ^[3]
High vs low: Record closing high of 31,477.57 on Thursday; weekly closing low of 31,049.28 on Tuesday. ^[4]
Macro driver: A blockbuster November jobs report (53,600 jobs added; unemployment down to 6.5%) reinforced the view that the Bank of Canada is done cutting rates and may even hike in 2026. ^[5]
Sector story:
- Early‑week tech and resource weakness
- Mid‑week energy and bank‑led rebound
- Late‑week materials and industrials drag as investors took profits. ^[6]
Currency: The Canadian dollar surged to a 10‑week high after the jobs data, as markets priced out further rate cuts. ^[7]

From Tech Slump to Record High: Day‑by‑Day TSX Action

Monday, Dec. 1 – Tech Selloff Knocks TSX off Its Record

After a strong November, investors opened December in a cautious mood. The TSX fell 0.9% on Monday to 31,101.78, giving back part of the previous month’s 3.7% gain. ^[8]

Key drivers:

Technology led the decline, dropping about 4.1% as Shopify plunged 6.3%. The e‑commerce giant suffered Cyber Monday login issues that impacted merchants, spooking traders already worried about stretched tech valuations. ^[9]
Financials slipped around 1% ahead of the big‑bank earnings barrage expected later in the week. ^[10]
A weak manufacturing PMI for November underscored trade‑related headwinds, though materials eked out gains as gold producer Barrick rose and the company flagged a potential IPO of its North American assets amid record bullion prices. ^[11]

The message from day one: investors were rotating away from high‑beta tech and waiting to see whether bank earnings would justify rich valuations.

Tuesday, Dec. 2 – Banks Beat, but Resources Drag

On Tuesday, the S&P/TSX Composite slipped another 0.2% to 31,049.28, extending the pullback from recent highs. ^[12]

Bank of Nova Scotia kicked off the Big Six results with a better‑than‑expected Q4 profit, sending its shares up about 2.8% to a record high. ^[13]
Laurentian Bank soared more than 18% after being snapped up by Fairstone Bank, highlighting ongoing consolidation in Canada’s financial sector. ^[14]
Financials overall gained roughly 0.7%, but this wasn’t enough to offset losses in commodities:
- Materials fell about 1.8% as gold and copper prices eased.
- Energy dropped around 1.6% as oil retreated. ^[15]
Shopify rebounded nearly 5%, lifting tech modestly after the company reported record Black Friday–Cyber Monday sales. ^[16]

Strategists framed the mild correction as “healthy,” arguing that liquidity remains abundant and that the overall setup for risk assets is still constructive. ^[17]

Wednesday, Dec. 3 – Energy and Banks Lead a Rebound

By midweek, the tone brightened. The TSX added 0.36% to close at 31,160.54 on Wednesday, supported by energy, industrials, and more bank beats. ^[18]

Energy stocks climbed about 2%, mirroring a 0.5% rise in oil prices as geopolitical tensions kept supply risks in focus. ^[19]
Railroads and other industrials advanced around 1.2%, reflecting confidence in the economic outlook. ^[20]
Royal Bank of Canada (RBC) shares rose about 1.1% to a record high after the bank beat Q4 earnings expectations, while National Bank also topped estimates despite a share price pullback. ^[21]

Behind the scenes, RBC’s full‑year 2025 results showed net income of C$20.4 billion, up 25% year‑over‑year, and a robust 16.3% return on equity, reinforcing the strength of Canada’s largest lender. ^[22]

Thursday, Dec. 4 – TSX Hits New Record as Bank Earnings and Oil Rally

Thursday was the high point of the week. The TSX surged 1.0% to 31,477.57, a new record closing high that surpassed last week’s peak. ^[23]

What drove the breakout:

Big Six banks firing on all cylinders
- TD Bank, Bank of Montreal (BMO) and CIBC all beat Q4 profit estimates, buoyed by strong capital markets revenues and stabilizing credit costs.
- CIBC jumped about 4.1%, TD gained roughly 2%, while BMO was little changed after its own beat. ^[24]
Energy stocks gained around 0.3% as oil rose more than 1%, helped by expectations of further U.S. rate cuts and stalled Ukraine peace talks that kept supply risk on the radar. ^[25]
Technology rallied about 2.7%, and consumer staples added roughly 1.3%, signaling broad‑based risk appetite rather than a narrow bank‑only move. ^[26]
Logistics software provider Descartes Systems jumped more than 14% after delivering stronger‑than‑expected revenue, adding to the tech‑and‑services tailwind. ^[27]

Strategists framed the rally as markets “looking through” near‑term noise and discounting an improving 2026 economic backdrop, especially as fiscal policy becomes more supportive and trade tensions show tentative signs of stabilizing. ^[28]

Friday, Dec. 5 – Jobs Blowout Meets Profit‑Taking

Friday brought the most important macro data of the week – and a counter‑intuitive market reaction.

The TSX fell 0.5% to 31,311.41, giving back part of Thursday’s gains and locking in that 0.2% weekly decline. ^[29]
Canada’s November Labour Force Survey surprised sharply to the upside:
- 53,600 jobs added, largely in part‑time roles.
- Unemployment dropped to 6.5%, a 16‑month low, versus expectations for a rise to 7%.
- It was the third straight month of robust job gains, bringing the tally since September to around 181,000. ^[30]

Instead of rallying on the good news, equities cooled as investors took profits near record levels:

Materials fell about 1.1%, pressured by weaker gold prices and news that Fairfax Financial sold a large stake in Orla Mining, which slid over 11%. ^[31]
Technology and industrials each lost roughly 0.8%, with Shopify again under pressure. ^[32]
The jobs beat also triggered a sharp repricing of interest‑rate expectations, which tends to hurt long‑duration growth stocks at the margin.

Meanwhile, the Canadian dollar rallied 0.7% against the U.S. dollar to its strongest level since late September, and two‑year Government of Canada bond yields jumped by nearly 17 basis points as traders moved to fully price in a rate hike in 2026. ^[33]

Macro Backdrop: A Strong Labour Market and a “Done Cutting” Bank of Canada

This week’s jobs data may prove a turning point for the Bank of Canada (BoC) narrative.

The BoC has already cut its overnight rate to 2.25% over the course of 2025, including a 25 bp move in October. ^[34]
Economists now almost universally expect the BoC to hold rates at 2.25% at its December 10 meeting, with swaps markets suggesting no further cuts through 2026 and even a meaningful chance of hikes if growth and inflation remain firm. ^[35]

Strategists at Edward Jones and RBC have argued that the combination of stronger‑than‑expected GDP, a tightening labour market and still‑elevated core inflation gives the BoC little reason to ease further, which helps banks (through more stable net interest margins) but could gradually cap valuation multiples for high‑growth names. ^[36]

For equities, the backdrop is increasingly one of steady but slower policy support rather than emergency‑style stimulus – a key nuance as investors think about 2026 returns.

Banks in Focus: Big Six Deliver, Valuations Tested

Canadian banks were the clear corporate story of the week:

All six major banks – RBC, TD, BMO, Scotiabank, CIBC and National Bank – reported quarterly profits ahead of analyst expectations, powered by:
- stronger capital‑markets fees,
- improving wealth‑management flows, and
- stabilizing credit provisions. ^[37]
RBC capped the season with:
- C$20.4 billion in net income for the fiscal year, up 25% year‑on‑year,
- a 16.3% return on equity, and
- a CET1 capital ratio of 13.5%, giving it ample flexibility for dividends and buybacks. ^[38]

Collectively, the Big Six generated more than C$16 billion in Q4 profit, underscoring why financials remain the single largest sector weight in the TSX. ^[39]

From a market perspective:

Near‑term: Earnings strength helped re‑anchor confidence in dividend growth and capital returns, supporting Thursday’s record high.
Medium‑term: With rate cuts likely over and the BoC expected to hold around 2.25% into 2026, banks are seen as steady compounders rather than explosive growth stories – still attractive for income‑oriented investors, but less likely to drive another 20%+ year for the index on their own. ^[40]

Energy, Materials and AI‑Driven Demand

Two of Canada’s traditional pillars – energy and materials – delivered mixed signals:

Energy:
- Oil prices edged higher mid‑week, aided by ongoing conflict‑related supply worries and optimism around global growth, lifting the TSX energy sub‑index. ^[41]
- Enbridge grabbed headlines by forecasting higher core profit in 2026 and outlining about C$10 billion in growth capital spending next year, driven partly by rising North American power demand from AI‑related data centers. ^[42]
Materials:
- Gold and copper weakness on Tuesday and Friday put pressure on miners, with the materials group ending the week softer despite supportive long‑term demand narratives tied to electrification and infrastructure. ^[43]

Several strategists note that Canada’s commodity‑heavy index construction may be a feature, not a bug, for 2026: AI and energy transition spending are likely to remain resource‑intensive, which could benefit Canadian oil, gas and metals producers even if global growth is only moderate. ^[44]

Index Changes: New Names Coming to the TSX Benchmarks

Late Friday, S&P Dow Jones Indices announced quarterly changes to the S&P/TSX Composite and S&P/TSX 60, effective before the open on December 22, 2025: ^[45]

S&P/TSX 60 additions:
- Celestica (CLS) – an electronics manufacturing and AI‑hardware beneficiary.
- Fairfax Financial (FFH) – a major property & casualty insurer.
S&P/TSX 60 deletions:
- Algonquin Power & Utilities (AQN)
- Canadian Apartment Properties REIT (CAR.UN)
S&P/TSX Composite additions include Allied Gold, Bitfarms, Lithium Americas, Strathcona Resources, Silvercorp, Taseko Mines, 5N Plus and Vizsla Silver, reinforcing the benchmark’s tilt toward gold, base metals, energy and specialized tech.

These changes can drive index‑linked flows in the coming weeks and highlight how the Canadian benchmark is being re‑balanced toward higher‑growth resource and technology niches, while trimming some rate‑sensitive utilities and real estate exposure.

How Pros Are Positioning for 2026: Forecasts and Strategy Views

Several major institutional outlooks landed this week, offering a useful backdrop to the market’s moves.

1. “Another Green Year” for Canadian Equities?

An in‑depth 2026 outlook from AGF Investments argues that, after a “blockbuster” 2025 in which the TSX outperformed the S&P 500 through the first 11 months, Canadian stocks still have “airspace” left. ^[46]

Key points from AGF’s Canada equity view:

Core drivers – banks, commodities, industrials, tech – remain well positioned heading into 2026.
They expect corporate earnings for the TSX to grow in the high‑single to low‑double‑digit range (roughly 8–12%) next year, supported by fiscal stimulus, lower borrowing costs versus 2023–24, and easing trade tariffs.
The base case is for only a small additional rate cut or a long hold from the BoC, which should be broadly positive for financials and the Canadian dollar. ^[47]

2. BMO Nesbitt Burns: Constructive but More Moderate Gains

BMO Nesbitt Burns’ 2026 Capital Markets Outlook – also released this week – paints a “middle‑aged bull market”scenario: ^[48]

Global and Canadian equities are expected to deliver high single‑digit to low double‑digit total returns, roughly in line with long‑run averages.
The team maintains an overweight to Canadian and U.S. stocks, citing supportive fiscal and monetary policy and resilient earnings.
They see the Bank of Canada holding near 2.25%, while their target for the S&P/TSX is 34,000 – about 8.6% above Friday’s close. ^[49]
Risks include pockets of exuberance in gold stocks and AI‑related sectors, where valuations are rich and sentiment elevated. ^[50]

3. Strategists on Cycles, AI and Sector Leadership

Across various commentaries:

Market strategists point out that Canada’s lower tech weighting and higher resource exposure may actually be an advantage in a world where AI and electrification boost long‑term demand for power and metals but could eventually challenge mega‑cap tech valuations. ^[51]
Many recommend balanced exposure across banks, quality cyclicals, and select resource names rather than an all‑in bet on any single theme, given the potential for volatility around tariffs, U.S. politics and central‑bank signalling in 2026. ^[52]

What to Watch Next Week

Looking ahead to the week of December 8–13, 2025, Canadian equity investors will focus on:

Bank of Canada Rate Decision (Dec. 10)
- Markets expect the BoC to hold at 2.25% and signal a prolonged pause through 2026. Any surprise shift in tone – especially hints of earlier‑than‑expected hikes – could jolt bank and rate‑sensitive stocks. ^[53]
Follow‑through after the jobs shock
- Watch whether Friday’s profit‑taking turns into a deeper consolidation, or if dip‑buyers step in given the still‑strong year‑to‑date gains and upbeat earnings backdrop. ^[54]
Commodity price trends
- Moves in oil, gold and copper will be critical for energy and materials – now even more so as the TSX Composite adds new miners and energy producers later this month. ^[55]
Global central‑bank messaging
- With the U.S. Federal Reserve expected to deliver another rate cut soon, the spread between U.S. and Canadian policy paths will influence both the loonie and relative performance of Canadian vs U.S. equities. ^[56]

Bottom Line for Investors

Despite finishing the week slightly lower, Canada’s stock market remains in a powerful uptrend, supported by:

strong bank earnings,
a surprisingly robust labour market,
a still‑accommodative but no‑longer‑easing Bank of Canada, and
constructive 2026 forecasts that call for positive – if more moderate – equity returns.

For now, the TSX story is less about chasing a melt‑up and more about navigating a late‑cycle bull market: one where stock‑picking, sector balance and attention to policy signals matter as much as the headline index level.

This article is for informational purposes only and does not constitute investment advice.