Written By
Nick Raffoul
Nick Raffoul is the Founder and Lead Analyst at Best Canadian Stocks. He graduated with a degree in Business Administration, has over a decade of writing experience, and grew his personal portfolio 153% from 2020 to 2024.
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All figures as of July 3, 2026.
The S&P/TSX Composite closed at a record high of 35,275 on Friday, July 3, 2026, up 0.88% on the day. The index crossed and held near the 35,000 mark Thursday before Friday’s record close. Year-over-year, the TSX is up roughly 30.5%.
It was a broad rally — 692 advancers versus 217 decliners, with 95 stocks unchanged. Materials, healthcare, and industrials led the way. But beneath the headline number, there’s a story worth understanding if you’re investing in Canadian equities.
What Drove the Rally
The catalyst was Thursday’s weak U.S. June jobs report. U.S. nonfarm payrolls rose by just 57,000 jobs versus expectations of roughly 113,000. The unemployment rate edged down to 4.2% — but only because labour force participation fell to 61.5%, its lowest level since early 2021. That soft print reinforced expectations of a more dovish Federal Reserve later in 2026, which in turn supported both gold and rate-sensitive equities.
Gold stocks led Friday’s gains. Southern Cross Gold Consolidated surged 9.56%, Discovery Silver jumped 9.09%, and Wesdome Gold Mines gained 8.11%. Large-cap miners also participated — Agnico Eagle, Barrick, and Wheaton Precious Metals all rose roughly 2%. Gold futures climbed 1.48% on Friday, benefiting from the dovish Fed narrative and easing inflation concerns.
Oil prices stayed near pre-conflict levels, with WTI crude trading in the US$70 range following the late-June reopening of the Strait of Hormuz. Crude rose 0.13% Friday, with Brent up 0.19%. The stability in energy markets is a tailwind for the broader dovish-rate thesis — less inflation pressure, more room for central banks to ease if economic data softens.
Earlier in the week, Shopify shares jumped 6.5% in U.S. trading on the announcement of a copyright settlement with Shopline. U.S. markets were closed Friday for the Independence Day holiday (July 4 falls on Saturday). Canadian markets were closed Wednesday for Canada Day. The TSX was open Friday and pushed to new highs in a quieter-than-usual session.
Friday’s laggards included Lightspeed Commerce (−1.89%), Empire Company (−1.40%), and Thomson Reuters (−1.37%). The selling was modest and isolated.
What It Means for Canadian Investors
A record close feels good. But after a 30.5% year-over-year gain, valuation deserves scrutiny. Much of the recent strength has come from sector rotation — gold miners and materials rallying on dovish Fed expectations, and energy steadying as geopolitical risk eased.
This is not the time to chase momentum. If you don’t already own Canadian stocks, don’t buy at record highs simply because the index is making new peaks. Wait for pullbacks. Build positions gradually. Prioritize quality over hype.
If you already hold dividend stocks, REITs, utilities, or other rate-sensitive equities, the dovish-rate narrative is supportive. Lower rates — or the expectation of lower rates — benefit income-focused portfolios by making yield more attractive relative to fixed income. That’s the bull case for dividend payers in the second half of 2026.
But don’t ignore risk. The Bank of Canada held its policy rate at 2.25% on June 10, the fifth consecutive hold. The next decision is July 15, with the Monetary Policy Report released simultaneously. Markets are pricing in a 96% probability of another hold. But the conversation is shifting to when cuts might resume, not if they’ll happen.
If the BoC signals a more dovish stance on July 15, rate-sensitive sectors could rally further. If the Bank pushes back against market expectations of cuts, we could see a correction in the most stretched sectors.
Don’t Forget Diversification
A 30.5% year-over-year gain is excellent. But diversification still matters. The recent leadership has been concentrated in materials and other macro-sensitive sectors — groups that benefit from specific conditions. If those conditions change, concentrated portfolios suffer.
Diversify across sectors. Hold both growth and income. Don’t overweight any single theme, no matter how compelling the narrative feels today. Record highs are not a reason to take on more risk. They’re a reason to review your portfolio, take some profits where appropriate, and rebalance toward quality.
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Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions.
Written By
Nick Raffoul
Nick Raffoul is the Founder and Lead Analyst at Best Canadian Stocks. He holds a degree in Business Administration and has over a decade of writing experience. Nick began investing just before the COVID-19 market crash in March 2020, growing his personal portfolio 153% by 2024. In 2022, he founded Best Canadian Stocks to make data-driven investing accessible to all Canadians. His goal is to help all of his readers achieve financial freedom, maximize their spending power, and reach their financial goals. Whether you're maximizing your TFSA, building an RRSP to save for retirement, or looking to buy your first stock, Nick has your back. His work covers Canadian equities, dividend investing, tax-advantaged accounts, and personal finance.
