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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US inflation delivered its sharpest monthly decline in six years yesterday, while JPMorgan and Goldman Sachs posted blowout second-quarter earnings — a one-two punch that lifted equity markets and shifted near-term Federal Reserve expectations just as Canadian investors prepare for today’s Bank of Canada rate decision.
US Inflation Posts Biggest Monthly Drop Since 2020
US headline CPI fell 0.4% month-over-month in June (seasonally adjusted), according to data released Tuesday by the Bureau of Labor Statistics — the largest monthly decline since April 2020. The annual rate dropped to 3.5%, down from 4.2% in May and well below the 3.8% consensus estimate compiled by LSEG.
Core CPI (excluding food and energy) came in flat month-over-month and 2.6% year-over-year, compared to expectations of +0.2% and 2.9% respectively. May’s core reading was 2.9%.
As we previewed yesterday, the data was closely watched for signals on whether the Fed might ease its hawkish stance. Fed hike odds for the July meeting fell to 17% from 42% on Monday, according to CME FedWatch data cited by CNBC. But traders still price a 63% chance that the Fed target rate ends up 25–50 basis points higher after the September meeting — this cycle remains about hike risk, not cuts.
Fed Chairman Kevin Warsh tempered any optimism in post-release comments: “There might be some that look at this morning’s data and say, ‘Oh, mission accomplished, everything is swell’ … That is not my view.”
Wall Street Banks Crush Q2 Estimates
JPMorgan reported earnings per share of $6.14 versus the $5.85 LSEG consensus, with revenue of $58.02 billion against $50.19 billion expected. Profit rose 41% year-over-year, marking one of the bank’s largest beats in recent quarters, according to CNBC coverage.
Goldman Sachs posted diluted EPS of $20.98 — nearly double a year earlier — with net revenue of $20.34 billion, up 39% year-over-year. The common thread in coverage: a surge in trading revenue drove the beats.
Bank of America, Citigroup, and Wells Fargo also reported Tuesday morning.
What It Means for Canadian Investors
The S&P/TSX Composite closed Tuesday at 35,320.54, up 67.82 points (+0.19%) and back above the 35,000 level, according to Yahoo Finance data. That puts the TSX modestly above Monday’s 35,252.72 close and positions Canadian equity markets in wait-and-see mode ahead of this morning’s Bank of Canada decision.
The BoC announces its rate decision and releases its Monetary Policy Report at 9:45am ET today. Consensus expects a hold at 2.25%, which would mark the sixth consecutive pause. Canadian inflation has run above 3% in recent months, driven primarily by the spring gasoline spike after the Iran conflict pushed oil prices higher. BoC officials have signalled they are willing to look past the initial energy price shock but remain prepared to act if inflation spreads beyond gas pumps, according to commentary from the Bank of Canada and analysis from RBC Economics.
The growth backdrop is mixed but firming. After a weak Q1 GDP print, monthly data points to stronger Q2 growth. Canada’s labour market showed signs of steadying in May and June, including the 18,000 jobs added in June we covered earlier this month. The MPR’s updated inflation and growth projections will be the wildcard for markets today.
For Canadian investors watching US bank strength and wondering how it translates north, the honest answer is that it doesn’t translate mechanically. Canadian bank stocks operate in a different rate and credit environment, and the next round of Canadian bank results arrives later this summer. What matters more for Canadian portfolios today is whether the BoC’s tone shifts in response to firmer domestic data or maintains its wait-and-see posture.
What to Watch
We think Canadian investors should focus on three things over the next 24 hours: the BoC’s language on inflation persistence, any updates to the MPR’s inflation and growth projections, and how markets react on either side of the 9:45am ET announcement. Watch how rate-sensitive corners of the TSX trade after the release, and whether the tone of the statement matches the consensus hold.
The US CPI print offers relief but not resolution. Inflation is cooling, but the Fed remains cautious. For Canadians, the immediate question is whether the BoC follows suit or takes a different path based on domestic conditions.
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Data as of July 14, 2026 (US CPI, bank earnings, TSX close). BoC decision schedule as of July 15, 2026. Sources: Bureau of Labor Statistics, CNBC, LSEG, CME FedWatch, Yahoo Finance, Bank of Canada, RBC Economics.
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.
