Markets

TSX ends September down 2.85%, snapping a five-month winning streak as bond yields climb

Three in four TSX stocks fell in September as global bond yields hit multi-decade highs; technology was the only sector to post a gain.

By John Wilson · September 30, 2026

Canada's main stock index closed out the third quarter on a weak note. The S&P/TSX Composite Index fell 0.63% on Wednesday to 35,235.87, finishing September down 2.85% and ending a five-month run of gains, according to market data and a month-end review by The Globe and Mail.

At quarter end the index sat nearly 5% below its record close of Aug. 25. Even so, it remained up 11.11% for 2026 on a price basis, a reminder that a poor month followed a very strong stretch.

The numbers

The last week of the month was the hardest: the index lost 0.87% on Monday, Sept. 28, and slipped again on Tuesday before Wednesday's drop.

S&P/TSX Composite, Sept. 30 close: 35,235.87, down 0.63% on the day
September: -2.85%, the first monthly decline in six months
Year to date (price return): +11.11%
Share of index stocks with a negative return in September: 75%; 40% fell 5% or more
Only sector in positive territory: information technology, +3.43%
Valuation: 16.9 times 2026 consensus earnings and 15.3 times 2027 earnings, per Bloomberg data cited by the Globe

Bonds set the tone

The backdrop was a sharp rise in borrowing costs worldwide. On Wednesday the 10-year U.S. Treasury yield climbed to 5.29% and the 30-year yield rose to 5.64%, levels not seen in more than two decades, according to a market report carried by BNN Bloomberg. Brent crude rose 1.9% to US$98.03 a barrel amid uncertainty over when Middle East oil flows will be fully restored. On Wall Street, the S&P 500 slipped 0.3%, its third losing month in four.

Higher yields tend to hurt interest-sensitive stocks most. A Sept. 30 roundup of analyst calls republished by the Globe found that utilities and power producers saw the broadest price-target cuts, while copper and precious metals coverage stayed firmer.

Where the winners were

Not everything fell. September's best performers were mostly industrial companies tied to infrastructure and construction: Aecon Group rose 25%, Celestica 24%, Russel Metals 23%, Bird Construction 21% and Finning International 20%, according to the Globe's tally.

The other side of the ledger

Analysts' expectations have not deteriorated with prices. Expected earnings growth for the index over the next 12 months rose to 13.4% from 12% a month earlier, according to the Globe, which means valuations got cheaper in September. The index also slipped below its 50-day moving average, a level that technical traders watch, so short-term swings could continue. The key risks remain the path of bond yields, oil prices and the Canada-U.S. trade dispute.

What it means for you

A 2.85% monthly decline after five months of gains is a normal part of investing in stocks, not a crisis. If you invest regularly through an RRSP, TFSA or FHSA, a down month simply means your contributions bought units at lower prices. If your portfolio has drifted far from your target mix after a strong year, a pullback can be a reasonable moment to rebalance rather than to make sweeping changes. This article is general information, not personal financial advice.

Sources

General news and information, not individualized financial advice. Figures reflect the publication date.