Market Recap* – Week of October 6

1. What happened in the markets?

Canadian equities declined as global sentiment weakened. Markets were pressured by renewed U.S.–China trade tensions and a stronger-than-expected Canadian jobs report, which reduced expectations for additional Bank of Canada easing. Energy and materials underperformed amid softer commodity prices and global growth concerns. Investor caution mirrored the pullback seen in U.S. markets through the week.

U.S. equities also retreated as risk appetite faded amid rising trade frictions and continued political uncertainty surrounding the federal government shutdown. Headlines around new tariff threats and China’s export restrictions on rare earth minerals reignited fears of a prolonged trade conflict. Growth and technology shares led the declines, while defensive sectors provided some support.

Canadian fixed income remained flat as investors sought steady returns amid heightened market volatility. The asset class provided balance within diversified portfolios, helping to offset weakness in equities during the week.

The Canadian dollar weakened slightly over the week. While strong employment data initially lent support by reducing the likelihood of near-term rate cuts, broad U.S. dollar strength and global market caution ultimately weighed on the Loonie. Overall, the week reflected a defensive market environment driven by trade concerns and political uncertainty.

2. What does it mean for Embark Funds?

Asset class change	Impact on cohorts
Equities ↓	Weaker Canadian and U.S. equity performance weighed on returns for younger cohorts with higher equity exposure.
Bonds – Flat (prices)	Stability in bond prices helped support older cohorts approaching maturity, where fixed income holdings are more significant.
Money Market – stable	Continued to provide steady income and preserve capital for near-maturity cohorts, offering stability amid market volatility.
Canadian Dollar ↓	The weaker Canadian dollar slightly boosted returns from foreign equity holdings, providing a small offset to domestic market losses.