Why the TSX Fell 1.7%: Gold’s Worst Close in a Year and a Chip Selloff
The S&P/TSX Composite fell 628.97 points, or 1.74%, to 35,620.03 on Friday, hit by two unrelated things. Gold closed at its lowest level in a year, dragging on materials, at 16.28% one of the index’s three largest blocks. Intel’s guidance sent semiconductors lower worldwide, and Canadian technology, only 8.90% of the index, fell hard enough to matter.
Wall Street was worse: the S&P 500 lost 1.82% and the Nasdaq 2.86%.
Gold’s lowest close in a year
The December contract closed at US$3,889.10, down 3.53%, its lowest close in at least a year and roughly 27% below January 29’s peak of US$5,318.40.
The chain runs through US rates. The PCE price index rose 0.5% on the month and 3.6% over 12 months in the Bureau of Economic Analysis’s September personal income and outlays release on Thursday, with core up 0.3%. The FOMC had held its target at 3-3/4 to 4 percent on a 10-2 vote in which both dissenters wanted an immediate quarter-point increase, the October 28 FOMC statement saying “Inflation remains elevated,” and traders price roughly a 75% chance of a December increase, per the CME’s FedWatch tool. Gold pays no income, so a market pricing hikes rather than cuts makes holding it costlier.
Materials took 78.7 basis points out of the composite, the largest single drag. A basis point is one hundredth of a percentage point; these contributions are our calculation from index weights, used to rank. Agnico Eagle, down 6.01%, was the heaviest at 14.5, then Wheaton Precious Metals at 8.6 and Barrick at 7.8. All-in cost per ounce decides which of them absorbs a US$3,889 gold price, and our ranking of Canadian gold miners on margin sorts on it.
Intel’s guidance took the chip complex down
In its Q3 2026 earnings release, Intel guided fourth-quarter revenue to $15.0 billion to $16.0 billion, against $16.5 billion delivered in the third quarter, up 21%, and non-GAAP EPS to $0.25. Client Computing and Physical AI revenue had already fallen 5% to $8.1 billion, while Data Center and AI rose 78% to $7.3 billion. CFO David Zinsner said the company sees “the PC slowdown continuing at least through the first half of next year” but remains “optimistic about the opportunities across our broader portfolio.”
Intel closed at $65.76, down about 29% from Thursday’s $92.07, and the Philadelphia Semiconductor Index fell 7.2% to 10,688.80, on Yahoo Finance closes. AMD lost 10.88% and Nvidia 4.22%.
The Canadian technology drag was mostly one stock. Shopify is 5.47% of the composite, and its 5.70% fall to C$220.37 took 31.2 of information technology’s 38.4 basis points, four days before it reports. Our read is that it fell on the rate story behind gold rather than on anything to do with chips: a high-multiple name reprices when the market starts pricing hikes. Celestica, the name actually exposed to the chip cycle, fell 6.77% to C$369.32 for 6.6 basis points, having raised full-year guidance on October 26.
The banks fell on the backdrop, not on news
Financials were the second-biggest drag at 55.5 basis points, and every Big Six name fell. Royal Bank, at 7.73% the index’s largest holding, fell 1.49% to C$283.93 and cost 11.5 basis points alone, with BMO down 2.87%, TD 2.30%, CIBC 1.97% and Scotiabank 1.79%. What moved them was the economy underneath: Statistics Canada reported this morning that August GDP was flat for a second month.
The Bank of Canada raised its policy rate to 2.5% from 2.25% on Wednesday, and two-year Government of Canada yields reached 3.36% on Thursday October 29, up 14 basis points in a week. One-month CORRA futures price another hike on December 9, at 51% of a 25 basis point move. More yield on the short end conventionally helps net interest margin, but a flat economy with a central bank tightening into it is worse for bank credit than either alone.
Energy made the largest positive contribution
Energy was worth 9.7 basis points, more than any other block, with communication services at 3.0 and consumer staples at 2.7 the only other positive contributors. The WTI December contract settled at US$104.07, up 2.02% from Thursday’s US$102.01 (NYMEX WTI, December contract, settlement-window price from Yahoo Finance trade data).
The sector ETF rose 1.71% while the index’s energy block returned only 0.57% cap-weighted, partly because Cameco sits in it and fell 7.74% to C$107.60 on its own quarter, costing 7.6 basis points. Without it, the rest of energy contributed 17.2. The remainder of the gap sits in the heavyweights: Suncor added 2.26%, Canadian Natural 1.78% and Cenovus 1.69%, but Enbridge gained 0.30% and TC Energy 0.11%, so pipeline holders rather than producers saw nothing happen on a 2% day for crude. Imperial Oil rose 5.37% to C$193.48 after its third-quarter results release posted record net income of $2,454 million against $539 million a year earlier.
What comes next
The composite still gained 1.09% in October after losing 2.85% in September. Apple reports on Monday November 2. AMD, Shopify and Suncor follow on Tuesday November 3, Cenovus, Tourmaline, Lundin Gold and B2Gold on Wednesday November 4, and Statistics Canada publishes the October Labour Force Survey on Friday November 6.
All figures are the October 30, 2026 close unless dated otherwise.
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. Index levels, sector moves and single-stock closes are the October 30, 2026 Toronto and New York closes. Sector and single-name contributions in basis points are our own calculation from S&P/TSX Composite index weights. The crude price is the NYMEX WTI December contract’s settlement window, 2:28 to 2:30 p.m. ET. Inflation figures are from the Bureau of Economic Analysis release Personal Income and Outlays, September 2026, published October 29. The Federal Reserve’s hold, the 10-2 vote and the quoted sentence are from the FOMC statement of October 28. Intel’s guidance, segment revenue and the quoted management commentary are from Intel’s own third quarter 2026 earnings release filed with the SEC on October 29. Imperial Oil’s figures are from the company’s own news release of October 30. August GDP is from Statistics Canada’s The Daily, October 30. Canadian two-year bond yields are Bank of Canada benchmark series readings dated October 29, because that series is published with a one day lag. Gold’s one-year low is measured against the front month gold futures close series, whose lowest close in the preceding 365 days was US$3,960.50 on November 4, 2025.
