Canada Stocks Slip as July Inflation Rate Surpasses Expectations

Canada's main stock index declined on Monday as July's inflation rate exceeded expectations, causing investors to become cautious. The S&P/TSX Composite Index dropped by nearly 0.2% to close at 36,667.92 points. Despite this decrease, some sectors, such as commodities, saw gains due to rising oil and gold prices.

OceanaGold announced its plan to acquire Australia's Ausgold in a deal valued at A$776 million, resulting in an increase in OceanaGold shares. However, underlying inflation pressures remained relatively contained, with the Bank of Canada's preferred CPI-trim and CPI-median measures holding near the 2% target.

CIBC senior economist Andrew Grantham noted that July's core inflation measures were tame enough that the Bank of Canada should not rush to raise its benchmark interest rate in response to price pressures. Analysts continue to expect the Bank of Canada to keep the overnight rate unchanged through the remainder of 2026, in line with the consensus among analysts.