Reversing the gains from yesterday's session, Canadian stocks plunged on Friday amid expectations of tighter monetary policy for an extended period following jobs data releases in Canada and the U.S. In addition, traders resorted to profit taking from yesterday's surge.
After opening below yesterday's close, today the benchmark S&P/TSX Composite Index traded firmly lower throughout the rest of the session before settling at 34,413.64, down by 803.42 points (or 2.28%).
Seven of the 11 sectors posted gains today, with the healthcare sector leading the pack.
Data released by Statistics Canada today revealed that the unemployment rate in Canada fell to 6.6% in May from 6.9% in the previous month, firmly below market expectations that it would remain at 6.9%.
Employment in Canada rose by 88,000 jobs in May, a 0.4% increase from April and well above market expectations for a gain of 10,000 jobs.
Employment increased among both private-sector workers (by 56,000 jobs ) and public-sector employees (by 20,000 jobs ).
The May data indicated that the first job growth in 2026, reflecting resilience in labor market despite concerns of high energy prices and U.S. tariffs impacting the economy.
Similarly in the U.S., the nonfarm payrolls today showed that the U.S. economy added 172,000 jobs in May, well above forecasts of 85,000 and the unemployment rate remained at 4.30%. These data again indicated a robust job market in the U.S.
A Reuters poll conducted among nearly 34 economists revealed that the Bank of Canada will hold its key overnight rate at 2.25% in its upcoming monetary policy announcement on June 10, and probably for the rest of the year.
Canadian investors are awaiting positive signals from the ongoing negotiations between Canada and the U.S. over the Canada-United States-Mexico Agreement on free trade.
The CUSMA deal, which is serving as a bypass route for Canadian exporters to escape U.S. tariffs, is coming up for renewal in July.
The U.S.-Israel versus Iran war entered day number 98 today.
On Wednesday, Israel and Lebanon agreed to halt their mutual strikes and renew the previous ceasefire. The truce was mediated by the U.S.
The ceasefire holds subject to a complete cessation of Hezbollah attacks as well as the evacuation of their operatives from the South Litani Sector, along with creation of pilot security zones by Lebanon where entry for Hezbollah militants will be banned.
The Iran-backed Hezbollah rejected the ceasefire and renewed their threats, but market participants discounted the warnings.
Yesterday, U.S. President Donald Trump assured that the ongoing U.S.-Iran talks were progressing well.
Trump predicted a Memorandum of Understanding to be signed by this weekend and anticipated reopening of the Strait of Hormuz once the MoU was agreed.
Iran's Foreign Minister Abbas Araghchi too confirmed that all channels for communication with the U.S. are open.
Yesterday, expectations of a return of peace in the Middle East following announcements on an end to Israel-Lebanon conflict as well as progress in U.S.-Iran talks raised investors' optimism, and as a result, the index surged, and today, traders monetized the gains.
In an interview with CNN today, President of Lebanon Joseph Aoun strongly condemned Iran using Lebanon as a a bargaining chip in U.S.-Iran negotiations. Aoun urged Hezbollah to understand that problems can be solved only through diplomacy.
Major sectors that gained in today's trading were Healthcare (3.77%), Consumer Staples (2.80%), Real Estate (0.95%), Utilities (0.44%), and Communication Services (0.28%).
Among the individual stocks, Transcontinental Inc (7.43%), Curaleaf Holdings Inc (6.57%), Metro Inc (4.37%), Weston George (3.79%), and CDN Apartment Un (2.28%) were the prominent gainers.
Major sectors that lost in today's trading were Industrials (0.41%), Energy (4.09%), IT (4.35%), and Materials (8.25%).
Among the individual stocks, Mda Space Ltd (6.21%), Bird Construction Inc (5.86%), Finning Intl (5.27%), Ero Copper Corp (16.12%), Americas Gold and Silver Corporation (15.45%), and Ngex Minerals Ltd (15.42%) were the notable losers.
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Business News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.