FX.co ★ TSX Drops on Hawkish BoC Expectations

The S&P/TSX Composite Index fell 1% on Friday, slipping below the 35,000 mark as investors digested stronger-than-expected employment data from both Canada and the United States. Canadian employment rose by 88,000 in May, far surpassing forecasts, while US payroll growth also surprised to the upside. The robust data pushed bond yields higher and reinforced expectations that the Bank of Canada and the Federal Reserve may keep interest rates elevated for longer, putting pressure on financial stocks and the broader index.

Major banks traded lower, with BMO and Scotiabank each declining by nearly 1%. Weaker gold prices weighed on mining shares, as Agnico Eagle and WPM fell nearly 3%, and Barrick dropped more than 3.5%. Shopify also slipped about 1% amid an AI-driven tech selloff following disappointing results from Broadcom. At the same time, ongoing uncertainty around Middle East peace efforts continued to undermine risk appetite and added to inflationary pressures.