Market Recap* – Week of September 22

1. What happened in the markets?

Financial markets delivered a mixed performance this week as the initial enthusiasm from recent interest rate cuts was tempered by persistent economic uncertainty. In the U.S., equities opened strong with technology leading markets to fresh record highs, supported by optimism around lower borrowing costs. However, momentum faded midweek as investors turned cautious, and by Friday, inflation data that matched expectations helped stabilize sentiment after several days of modest pullbacks.

Canadian equities mirrored this pattern, with the TSX posting one of the year’s strongest closes on Monday before drifting lower over the rest of the week. Weaker domestic growth expectations and renewed concerns around U.S. trade tariffs weighed on sentiment, though resilience in energy stocks helped offset broader losses.

In fixed income, Canadian bonds traded largely flat throughout the week but ended slightly weaker, with prices reflecting market expectations of further easing if unemployment rises or inflation remains contained. Meanwhile, the Canadian dollar weakened steadily, pressured by sluggish economic data and rate cut expectations. Overall, markets remain caught between the support of central bank action and ongoing uncertainty around inflation, growth, and trade, leaving investors cautious heading into the next round of data.

2. What does it mean for Embark Funds?

Asset class change	Impact on cohorts
Equities	Softer Canadian and U.S. equity performance weighed on younger cohorts’ portfolio returns.
Bonds	Slightly negative for older cohorts closer to maturity with larger exposure to bonds.
Money Market	Offered steady income, especially for near-maturity cohorts.
Canadian Dollar	The depreciation of the Canadian dollar enhanced returns from foreign equity exposure.