Current Economics
Today's Market Brief — October 1, 2026
What's changed since our last update on September 28, plus what to watch tomorrow.
Published 2026-10-01 · Educational information only
Markets Overview
Markets were mixed to close out the third quarter on Wednesday, September 30, as August's PCE inflation report — the Fed's preferred gauge — came in cooler than expected. The softer print eased some pressure on the Fed to raise rates again later this year, though bond yields stayed elevated and the Dow lagged the other major indexes. For the month of September, the S&P 500 slipped 0.4% and the Dow fell 4.3%, while the Nasdaq gained 1.9%; for the full third quarter, the S&P 500 rose 2.0%, the Nasdaq rose 2.5%, and the Dow fell 2.7%.
Canadian Equities (TSX)
The S&P/TSX Composite fell 224.40 points (-0.63%) to 35,235.87 on Wednesday, a nearly two-month low, as elevated bond yields continued to weigh on the index even with firmer commodity prices.
U.S. Equities (S&P 500, Dow, Nasdaq)
U.S. stocks finished mixed: the Dow fell 0.86% to 50,906.05, the S&P 500 slipped 0.25% to 7,651.54, while the Nasdaq bucked the trend to close up 0.24% at 26,861.06, helped by the cooler inflation data.
Bond Yields & Interest Rates
The U.S. 10-year Treasury yield held near the multi-decade highs reached last week, even as the softer PCE report argued for some relief — a sign markets are still digesting how much further the Fed might need to go after this month's hike.
Federal Reserve & Rate Expectations
August's PCE price index rose 0.3% on the month, with the year-over-year rate holding at 3.4% — below the 3.7% economists expected. Core PCE, which excludes food and energy, rose a softer-than-expected 0.2% on the month and held at 3.0% year-over-year, versus forecasts of 3.3%. Coming just two weeks after the Fed raised its benchmark rate to 3.75%-4.00%, the cooler reading gives the Fed some room to pause before considering another move.
Commodities (Oil & Gold)
Oil firmed, with the November WTI contract rising $1.04 to $90.42 a barrel. Gold edged higher as well, with the December contract up $7.00 to $4,186.70 an ounce.
Canadian Dollar (CAD/USD)
The loonie weakened further, with USD/CAD trading near 1.4233 by Wednesday evening — its softest level this cycle — as the widened Bank of Canada-Fed rate gap and persistent trade tensions continue to pressure the currency.
What This Means
Looking ahead to tomorrow: Friday, October 2 brings September's non-farm payrolls report, the week's main event. Economists expect a slowdown to roughly 90,000 jobs added (from August's 162,000), with unemployment expected to hold at 4.1%, a one-year low. Coming two weeks after the Fed's hike and ahead of its October 27-28 meeting, this print will be read closely for whether the labour market still has enough strength to support another rate increase. Day-to-day market moves are normal and are not a reason to change a long-term plan on their own. If tomorrow's jobs data raises questions about your own portfolio, protection, or goals, that is a good reason to book a 30-minute session rather than react alone.
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