Canada Stocks: Financial stocks drag TSX lower; Middle East jitters linger

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20/07/2026 16:24

Canada's inflation cooled more than expected to 2.8% in June
Financial, healthcare stocks dip
Tech stocks gain
By Sudeshna Ghoshal

    July 20(Reuters) - Canada's main stock index fell on Monday, weighed down by financial and healthcare stocks, as investors remained cautious of escalating U.S.-Iran tensions and assessed a softer-than-expected domestic inflation reading. 
The S&P/TSX Composite Index .GSPTSE fell 0.2% to 35,192.84 points by 11:00 a.m. ET.
Financial stocks were among the biggest decliners, led by Canadian Imperial Bank of Commerce CM.TO and National Bank of Canada NA.TO, both down over 1%. 
Healthcare sector .GSPTTHC was down 1%, dragged by losses in Bausch Health CompaniesBHC.TO and Curaleaf Holdings CURA.TO.
Only four out of 10 major sectors traded higher.
The S&P/TSX Capped Information Technology index .SPTTTK was up 1%, steadying after recent jitters in the sector. It tracked gains in the tech-heavy U.S. Nasdaq .IXIC.
Celestica CLS.TO, Shopify SHOP.TO and Tecsys TCS.TO  were among the top gainers, up between 0.2% and 1.7%.

        "If you need a growth-oriented portfolio, you need to be invested in tech. I don't think investors can shift away from tech," said Alan Small, senior investment adviser of the Allan Small Financial Group with iA Private Wealth.
      
On the data front, Canada's annual inflation rate cooled more than expected to 2.8% in June, as gasoline prices fell sharply following an interim U.S.-Iran truce aimed at ending the war.
Still, traders are pricing in an increase of at least 25 basis points to interest rates by end-2026, LSEG-compiled data showed.
Small said he expects no increase to rates, as the Canadian economy was "still too weak" and trade differences with the U.S. have not been resolved.
The heavily-weighted energy sector gained 0.4% even as oil prices retreated from earlier highs. Yemen's Houthis declared a naval blockade against Saudi Arabia, threatening to disrupt energy shipping beyond the conflict region. 

 (Reporting by Sudeshna Ghoshal in Bengaluru; Editing by Sahal Muhammed)
 ((Sudeshna.Ghoshal@thomsonreuters.com;))