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 S&P/TSX Composite hit a fresh record close on Wednesday, marking the third consecutive session of new highs, as US inflation data met expectations and eased concerns about a potential Federal Reserve rate hike next month.
In our August 11 article, we asked: “TSX Hits Record High on Energy: Can It Hold Through CPI?” The answer, at least for now, is yes.
US Inflation Data Meets Expectations
US headline CPI rose 0.1% month-over-month in July, bringing the annual rate to 3.4%, down from 3.5% in June, according to the Bureau of Labor Statistics. The reading met the Dow Jones consensus exactly — no surprises.
Core CPI, which excludes food and energy, rose 0.2% month-over-month after remaining flat in June. The annual core inflation rate fell to 2.5% from 2.6%, marking the slowest pace since 2021.
Shelter costs accounted for roughly two-thirds of the monthly increase, rising 0.1%. Food prices also edged up 0.1%. The energy index fell 1.5% month-over-month, though it remains elevated at 14.7% year-over-year. Gasoline prices are up 24.6% compared to July 2025.
US stock futures moved higher after the data, and Treasury yields pulled back broadly. The in-line print eased concerns about a potential Fed rate hike at the next meeting in September.
TSX Extends Record Streak
The S&P/TSX Composite rose 0.51% to a fresh record on Wednesday, touching an intraday peak of 36,662.14. Mining and technology shares led the gains, while energy and industrials each advanced 0.8%.
The move higher was driven by improved risk appetite following the CPI data. With inflation showing signs of moderating — even as it remains above the Fed’s 2% target — the path to avoiding further rate hikes appears clearer.
The Canadian dollar strengthened to near two-month highs, while Canada’s 10-year yield fell 2.3 basis points to 3.685%. Canada’s 2-year yield is up 16 basis points over the past month.
Gold dipped 0.58% on Wednesday.
Three Things Worth Watching
Brent crude snapped its five-day rally. Oil fell 1.56% on Wednesday, marking the first down day after the five-straight-day rally driven by escalating tensions in the Strait of Hormuz. Energy stocks still posted solid gains on the day, but crude’s first decline in six sessions is worth watching for investors in the sector.
Constellation Software fell despite higher profit. Shares of Constellation Software dropped 4.51% on Wednesday, even after the company posted a rise in second-quarter net income. The move highlights the disconnect that can occur between earnings results and market reaction — a reminder that stock prices reflect expectations, not just results.
Air Canada restored its profit target. Shares of Air Canada surged 12.25% after the airline restored its annual core profit target, albeit at a lower level than its previously suspended outlook. Exchange Income Corp rose 5.66%, and Celestica jumped 9.20%.
Data as of August 12, 2026 market close.
What Canadian Investors Should Do
Markets don’t move in straight lines, and record highs don’t mean the next move is necessarily down. What they do mean is that the market is pricing in optimism — in this case, optimism that inflation is moderating without triggering a sharp economic slowdown.
For Canadian investors, the playbook remains the same: stay diversified, keep registered accounts topped up, and avoid trying to time the market. The TSX has delivered three consecutive record closes, but those gains were built on a foundation of energy, materials, and technology leadership — not speculation.
If you’re holding quality Canadian stocks in your TFSA or RRSP, let them compound. If you’re underexposed to the market, use pullbacks to add. If you’re overconcentrated in a single sector, use strength like this to rebalance.
The Bank of Canada’s next rate decision isn’t until September 2, and Canada’s July CPI data is expected around August 17. Between now and then, the market will continue to react to earnings, commodity prices, and macro data. The best approach is to stay informed, stay disciplined, and stay invested.
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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. Data as of August 12, 2026.
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.
