Canada Stocks: Toronto stocks slip after Warsh's remarks; GDP data in focus

Zabka SA

28/08/2026 15:59

Consumer staples shares climb
Canada second-quarter GDP grew at an annualized pace of 3.3%
Warsh notes lack of recent progress on lowering U.S. inflation
By Sudeshna Ghoshal
August 28 (Reuters) - Canada's main stock index edged lower on Friday after Federal Reserve Chair Kevin Warsh reaffirmed his focus on bringing back inflation to the central bank's 2% target, while investors weighed domestic GDP data alongside Middle East developments.
The S&P/TSX Composite Index .GSPTSE slipped 0.4% to 36,705.82 points by 10:30 a.m. ET.
Traders raised expectations for a Fed rate hike in September after Warsh said recent inflation data did not signal a shift in trend, adding that the Fed still had "more work to do" before it could be confident inflation was moving toward its 2% target.
The Bank of Canada is widely expected to keep interest rates unchanged in September, with traders pricing in a 45.9% chance of a rate hike in December, LSEG data showed.
GDP data released on Friday showed that Canada's economy grew by 3.3% on an annualized basis in the second quarter, the fastest rate since 2023, on higher exports and robust domestic demand. An advance indicator showed that the economy was largely flat in July.
"The preliminary estimate of unchanged GDP in July and the headwinds from new U.S. tariffs means it is unlikely that this momentum will be sustained," Ariane Curtis, senior North America economist at Capital Economics, said in a note.
Consumer staple stocks .GSPTTCS were among the top gainers on the TSX, lifted by a 0.8% gain in Alimentation Couche-Tard ATD.TO. The firm said on Wednesday it was launching a voluntary tender offer for all shares of Polish convenience store chain Zabka ZAB.WA at 32 zlotys each.
Meanwhile, the energy sector .SPTTEN shed 0.2% as oil prices held steady with traders weighing stagnant U.S.-Iran diplomatic talks against some crude flows through the Strait of Hormuz.
Four of TSX's 10 major sectors traded lower.
Separately, U.S. President Donald Trump renamed Lake Ontario "Lake America" on Thursday, deepening a dispute with Canada that has already spawned tariffs on tens of billions of dollars in cross-border trade.

 (Reporting by Sudeshna Ghoshal in Bengaluru; Editing by Diti Pujara)
 ((Sudeshna.Ghoshal@thomsonreuters.com;))