The S&P/TSX Composite Index slipped about 0.5% to below 36,000 on Monday as investors weighed fresh inflation data and the implications for Bank of Canada policy. Canada’s annual inflation rate rose to 3.1% in September, a four-month high driven primarily by higher gasoline prices, though the figure came in just under the market consensus of 3.2%.
Even with the modest downside surprise, expectations for the BoC remained skewed toward tighter policy, as officials continued to highlight upside risks to inflation. Governor Tiff Macklem said on Saturday that the central bank plans to raise its quarterly inflation forecast significantly this month, reinforcing last week’s hawkish comments on energy-related price pressures.
Oil prices stayed elevated amid attacks on tankers in the Strait of Hormuz, keeping inflation concerns in focus. Still, energy producers retreated as crude pulled back from recent highs. Major banks also weakened, with RBC, BMO, and Scotiabank each down about 0.5%, while mining stocks declined alongside a slight dip in gold prices.