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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The TSX Composite retreated from its record close on Thursday, falling 76.05 points or 0.2% to close at 35,340.15, one day after closing at a record 35,416.20 on Wednesday.
Gold miners led the decline as gold prices fell to a two-week low. Materials was the session’s weakest sector, dragged down by major gold and precious-metal miners including Agnico Eagle, Barrick and Wheaton Precious Metals, all of which posted declines.
The pullback comes as escalating Middle East tensions raised inflation concerns and fears of tighter US Federal Reserve policy. Gold prices retreated despite the geopolitical backdrop, while oil prices rose on Middle East supply concerns, adding to inflation worries. Bond yields reportedly moved higher during the session, pressuring financials.
Bank stocks also contributed to the pullback, with RBC, TD Bank, Scotiabank and CIBC each falling nearly 1% on Thursday. Canadian bank stocks slipped after a record rally, giving back a portion of Wednesday’s 1.6% financials gain.
Utilities and consumer staples provided support, while energy remained relatively stable on firm crude prices.
The broader trade backdrop also weighed on sentiment. US Trade Representative Jamieson Greer said talks with Canada have yet to deliver the concessions sought by the US administration, according to reports.
What This Pullback Means for Long-Term Investors
Pullbacks from record highs are normal. The TSX fell below 35,000 on July 8 as Fed minutes flagged hike risk, only to rebound to a record within a week. Thursday’s 0.2% decline is modest in the context of a market that has rallied sharply this year.
Gold stocks, which lifted the TSX to a record high earlier in July, are notoriously volatile. A two-week low in gold prices after a strong run is not unusual. Similarly, oil surged on Iran strikes earlier this month, demonstrating how quickly commodity-driven sectors can move.
For investors with a long-term horizon, single-day moves driven by commodity price fluctuations and bond yield shifts are typically noise. The TSX remains near record levels, and Canadian financials are up 25.4% year-to-date, according to Wednesday’s data.
The Bank of Canada held its policy rate at 2.25% on July 15, with the next decision not until September 2. A stable rate environment supports equity valuations, even as bond yields move day-to-day.
Bull and Bear Cases
The bull case: The TSX hit a record high just two days ago. Financials are up over 25% this year. The Bank of Canada is holding rates steady. Thursday’s pullback was modest, and defensive sectors provided support. Long-term investors who rode out the July 8 dip below 35,000 were rewarded with a record high within days.
The bear case: Rising bond yields pressure financials, which are a major TSX component. Inflation concerns driven by Middle East tensions could force central banks to hold rates higher for longer. Gold retreated to a two-week low even as tensions escalated, with reports pointing to fears of tighter US Federal Reserve policy — a headwind for the miners that led the TSX’s rally earlier this month. Trade tensions with the US remain unresolved.
The reality is likely somewhere in between. Markets move both ways, and a 76-point decline after a record high is hardly a crisis. For Canadian dividend investors and those building positions in bank stocks, Thursday’s pullback may simply be a normal pause in an uptrend.
What Long-Term Investors Should Not Do
Don’t panic-sell quality Canadian stocks on a 0.2% pullback from a record high. Don’t chase gold stocks on a dip without understanding your thesis. Don’t abandon your investment plan because bond yields moved higher for one session.
What you should do: review your portfolio allocation, ensure you’re comfortable with your risk exposure, and consider whether Thursday’s dip presents an opportunity to add to positions you’ve been watching. If you don’t yet have a brokerage account, compare Canada’s investing platforms and pick one that fits how you invest.
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Data as of July 16, 2026 market close.
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.
