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Highlights
Canadian equities advance after digital service tax repeal
U.S. markets extend upward momentum, setting fresh records
Broad sector gains lift S&P/TSX composite in Monday’s session
Canada’s primary stock benchmark finished higher Monday, as broad-based sector growth fueled a rebound. The S&P/TSX Composite Index (OSPTX) rose following the federal government's decision to roll back a planned digital service tax. That reversal appeared to have eased trade tensions and helped stabilize equity sentiment.
Repeal of tax triggers market-wide strength
The digital service tax, which had been scheduled for enforcement early in the week, was withdrawn over the weekend. The move followed criticism from U.S. officials, leading to a pause in bilateral negotiations. With the tax no longer active, Canadian equities responded positively across sectors, reflecting improved trade dialogue conditions.
Energy, industrials, and financials were among the strongest performers. The gains offset losses experienced late last week, when equities briefly turned downward in response to policy uncertainties. The S&P/TSX Composite Index tracked upward from its previous position, showing widespread participation in the bounce-back.
U.S. indices continue upward path
In tandem with Canada’s gains, U.S. stock markets also extended their rally. Major indices in New York reached new levels, building on consecutive monthly increases. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite each moved higher, maintaining momentum that began earlier in the summer.
The move followed signs that trade-related friction may ease. There is a renewed focus on reducing tariff proposals, a shift that has buoyed sentiment in equity markets across North America. In particular, gains in technology and consumer-facing sectors contributed to the upward movement south of the border.
Market sentiment boosted by clearer trade outlook
Trade-related developments have played a central role in driving market sentiment recently. After the withdrawal of the digital service tax, Canadian authorities emphasized ongoing efforts toward strengthening bilateral economic frameworks. That shift was seen as supportive of financial stability and sector performance.
Market participants responded positively to the removal of policy overhangs. With broad equity segments advancing, the outlook for areas tied to cross-border commerce showed resilience. Top dividend ETF funds with Canadian equity exposure were among those reflecting improved sentiment during the session.
Equity strength sustained across Canadian sectors
All key sectors on the Toronto Stock Exchange reported advances during the trading day. Materials and industrials recorded gains, alongside technology and financials. With economic policy concerns subsiding temporarily, market strength was observed across both cyclical and defensive categories.
The performance marks a reversal from Friday’s declines, which had followed uncertainty over regulatory impacts on digital platforms. Monday’s rebound across major tickers helped restore confidence in domestic equities. Top dividend ETF products tracking the TSX also reflected the broader improvement, particularly within income-focused portfolios.
