Morning Money | Weekly Recap Friday, October 16, 2026
THE BIG PICTURE
This week, markets were reminded that inflation and borrowing costs still matter, even in the middle of the AI boom.
U.S. inflation climbed to 3.7% in September, driven largely by rising energy prices. That raises concerns that interest rates could remain elevated longer than investors hoped.
For Canadians, the implications are significant: higher gasoline costs, continued pressure on household budgets and uncertainty surrounding mortgage rates.
Meanwhile, Canada's weakening job market is complicating the Bank of Canada's next interest-rate decision.
THE WEEK IN MARKETS
• Technology: AI-related stocks struggled as investors questioned whether heavily indebted data-centre companies can sustain their massive spending. The Nasdaq was down approximately 2.4% for the week through Thursday.
• Canadian stocks: The TSX rebounded 1.6% Thursday, reaching a three-week high as mining and technology shares recovered.
• Interest rates: The U.S. 10-year Treasury yield retreated toward 5.1%, offering some relief after weeks of rising borrowing costs.
• Oil: Brent crude remained near US$105–106 per barrel, with Middle East supply disruptions continuing to support prices.
• Corporate earnings: Major U.S. banks delivered mixed results, while investors increasingly focused on whether corporate profits can justify elevated stock valuations.
WHAT TO WATCH NEXT WEEK
Canada's September inflation report arrives Monday, October 19, alongside fresh Bank of Canada surveys of businesses and consumers.
These releases could significantly influence expectations ahead of the Bank of Canada's October 28 interest-rate decision.
U.S. corporate earnings will also remain in focus as investors look for evidence that companies can maintain profitability despite higher financing costs.
