Global Equity Weekly

August 29, 2025 | 16:39

Summer Gains, Summer Losses

Economist

Senior Economist and Vice President
Economics

Carl Campus joined BMO Economics in 2007 as a Research and Technical Assistant; he was later promoted to his cur... (Read more)

Carl Campus

Senior Economist and Vice President
Economics

Carl Campus joined BMO Economics in 2007 as a Research and Technical Assistant; he was later promoted to his cur... (Read more)

It was a mixed week for equities, with plenty of economic and political developments tugging stocks in either direction as August came to a close. While cooler temperatures prevailed by week’s end, lingering concerns over Fed independence, sticky inflation and uncertain trade prospects didn’t stop the S&P 500 from reaching a new all-time high (Thursday) on its way to a fourth-straight monthly gain. So much for ‘sell in May and go away’. On a sectoral basis, banks and energy provided the most support, while consumer staples and utilities weighed.

This week’s U.S. economic data revealed some further signs of resilience, particularly in regards to business investment, which helped drive an upward revision to Q2 real GDP (now +3.3% a.r.). The U.S. consumer wasn’t too shabby either, with income and spending levels holding up well in July—a good sign for the start to Q3.

North of the border, the macroeconomic picture was less friendly. Friday’s key release of Q2 real GDP was a clunker. Still, it probably wasn’t bad enough in itself to propel the Bank of Canada into rate-cutting action on September 17, but there’s still some key data to go (namely the August employment and CPI reports). Despite the weaker data and lack of positive traction in U.S. trade talks, the TSX continued its near-steady summer ascent adding 0.8% this week, led by financials, energy and materials. Notably, this puts the index up 9.1% since the end of May, nearly matching the performance of the S&P 500, which rose 9.3% over that period.

Source: Bloomberg.

Unfortunately, those good late-summer equity market vibes didn’t extend to Europe. While Germany’s DAX index took a loss in each session this week, France’s CAC 40 experienced a deeper slump as PM Bayrou announced that he will put his government at stake in a September 8 confidence vote, thrusting the country into a renewed bout of political turmoil. This won’t be the first confidence vote the PM has faced in his eight months on the job, but it could be his last as the largest bloc in parliament, the far-right Rassemblement National, has vowed to vote against the government this time around. Thus, the cycle of French political turbulence continues.

Flipping over to Asia, the CSI 300 (+2.7%) put in a volatile but very positive week as renewed threats for higher U.S. tariffs on China were largely shrugged off amid further stimulus announcements. Meantime, Japan’s Nikkei 225 (+0.2%) moved mostly sideways as trade deal uncertainty continues to linger, despite the July 23 agreement, while India’s Nifty 50 plunged 1.8% in the wake of increased U.S. tariffs due to a dispute over Russian energy imports.

Major Index Performance

North American Sector Performances

(% change over period)

Table 1 - S&P 500 Sector Performance

Source: BMO Economics, Bloomberg

Table 2 - TSX Sector Performance

Source: BMO Economics, Bloomberg

TSX Relative Sector Performance

(relative to the index, year-ago = 100; dashed line = 200-day m.a.)

S&P 500 Relative Sector Performance