TSX Rallies as Oil Slips Below $100, Fed Hike Odds Near 86%
The S&P/TSX Composite was trading at 35,834.76, up 0.93%, recovering much of Thursday’s 1.11% drop to 35,506.28. All intraday figures in this piece are data as of roughly 10:00 a.m. ET on Friday, September 11, and will move through the session.
The bounce is broader than Canada. The S&P 500 was at 7,676.50, up 1.12%, and the NASDAQ Composite at 26,409.99, up 1.26%, after both closed lower on Thursday at 7,591.70 and 26,081.72. Yahoo Finance notes the major US indexes came into Friday on a four-day losing streak.
Two things landed before the open. August US inflation arrived at 8:30 a.m. ET, and crude gave back most of a violent Thursday move.
August US inflation came in where economists expected
The Bureau of Labor Statistics CPI news release put all-items CPI up 0.4% month over month on a seasonally adjusted basis in August, after a 0.1% rise in July. Over the last 12 months, the all-items index is up 3.4%.
Core CPI, which strips out food and energy, rose 0.3% on the month after 0.2% in July, and is up 2.4% over 12 months.
Energy did the heavy lifting. The energy index rose 2.1% on the month and is up 16.3% for the 12 months ending August. Gasoline alone rose 3.9%, “accounting for over one third of the monthly all items increase,” in the BLS’s wording. The two largest components of a household budget were comparatively quiet: shelter rose 0.3% on the month and 3.0% year over year, and food rose 0.1% on the month and 2.7% year over year.
Against forecasts, this was close to a clean match. Economists polled by Yahoo Finance expected 0.4% month over month and 3.4% year over year on the headline, and got exactly that. Core year over year also met the 2.4% expectation. The one deviation was core on the month, which printed 0.3% against a 0.2% forecast, slightly hotter than expected.
Rate traders are now pricing a hike, and equities rose anyway
That is the part worth sitting with. As of Friday morning, markets were pricing roughly an 86% chance that the Federal Reserve raises its policy rate by 25 basis points next week, according to CME FedWatch data reported by Yahoo Finance. That is up from 72% the previous day and about 50% a week earlier. The two-day FOMC meeting begins Tuesday, September 15, with the decision due Wednesday, September 16 at 2:00 p.m. ET.
So the tape is doing something that does not fit the simple story. Odds of tighter US policy climbed sharply over the week, and equities are up close to 1% in Toronto and more than 1% in New York this morning. We are not going to invent a reason for that. What the numbers do establish is narrower and still useful: the August inflation figure is now published and matched the headline forecast, and at 86% the Wednesday outcome is heavily priced rather than a coin flip. If the Fed does hike, it does so into a market that has already moved most of the way toward expecting it.
Crude round-trips back under $100
WTI crude was at $98.74 USD, down 3.65%, after settling at $103.89 USD on Thursday, an 8.16% jump on the day. Thursday’s spike followed the largest exchange of strikes yet between the US and Iran around the Strait of Hormuz on Wednesday, the second oil shock in a week after Tuesday’s attacks on Saudi facilities.
Today’s move is a give back of most of that spike, and that is as far as the data on hand lets us go. Nothing we can verify explains the retreat beyond the tape itself.
If you are wondering why a round trip in crude has not shown up as a round trip in Canadian energy names, we looked at exactly that this morning in Why Canadian Energy Stocks Didn’t Rally as Oil Topped $103, which is the piece to read before drawing conclusions about the sector from the barrel price.
One caution on sector reads: the only sector detail available is Thursday’s close, when TSX materials fell 3.72%, gold miners 2.82%, utilities 1.64% and real estate 1.52%, with financials up 0.29% as the lone green sector. There is no intraday sector breakdown for today.
Gold holds its bid while stocks run
Gold was at $4,434.70 USD, up 1.61%, after falling 1.28% to $4,359.60 USD on Thursday. Gold rising on the same morning that equity indexes rally is a combination worth noticing rather than explaining away, and readers tracking that strength can see how it filters into Canadian-listed producers on our Canadian gold stocks page.
Crypto is running harder than either. Bitcoin was at $79,502 USD, up 3.83%, and Ethereum at $2,639 USD, up 8.30%. That Ethereum move follows the setup we examined this morning in Ethereum’s Golden Cross Came First.
Among US mega caps, AMD was up 2.99% at $518.65, Apple up 1.79% at $332.42 and Nvidia up 1.47% at $221.56.
What this means for a Canadian investor
The Bank of Canada’s overnight rate sits at 2.25%, unchanged since October 30, 2025, and its last move was a cut, from 2.50%. If the Fed delivers the hike that traders are now pricing, the gap between US and Canadian policy rates widens. Mechanically, a wider rate gap tends to pressure the Canadian dollar, and the loonie was already softer on Friday at $0.7216 USD, down 0.39%.
The next Canadian data point arrives first. Statistics Canada releases the August Consumer Price Index on Monday, September 14 at 8:30 a.m. ET, alongside July manufacturing sales. The same energy prices that pushed the US headline number higher feed into Canada’s print, and it lands the morning before the Fed meets. For anyone holding Canadian equities, Monday at 8:30 is the more consequential half hour of the two.
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