Market Recap* – Week of May 11, 2026

1. What happened in the markets?

Canadian equities moved lower over the week, as weakness in commodity prices weighed on the broader market. Declines in materials, consumer discretionary, and technology stocks were the main drivers of the pullback, offsetting strength in energy, which benefited from higher oil prices. Investor sentiment remained cautious amid ongoing geopolitical developments and uncertainty around global growth, while broader inflation concerns and rising energy costs added pressure to risk assets.

U.S. equities finished the week higher, supported by resilient investor demand and continued momentum in large companies. The market reached record levels during the week before giving back some gains late in the period, as inflation concerns and rising interest rate expectations created volatility. Inflation data released during the week showed consumer prices rising by 0.6% in April and 3.8% over the past year, reinforcing expectations that borrowing costs may remain higher for longer. Economic data also showed consumer spending remained steady, supporting the broader market. Sector performance was mixed, with strength in energy and defensive sectors offsetting declines in areas such as technology and industrials.

Canadian fixed income markets declined over the week, with bond prices falling as investors reacted to rising inflation concerns and higher energy prices. Stronger inflation data in the United States added to expectations that interest rates may remain elevated, which put upward pressure on borrowing costs and weighed on bond prices. In Canada, markets also adjusted to this environment, with investors becoming more cautious on interest rate-sensitive assets. Overall, the decline reflected a repricing of rate expectations rather than any shift in domestic economic conditions.

Money market instruments edged higher over the week, reflecting stability in short term interest rates.

The Canadian dollar weakened against the U.S. dollar over the week, as the U.S. dollar strengthened broadly. Stronger U.S. inflation data increased expectations that interest rates may remain elevated, making U.S. investments more attractive and supporting demand for the U.S. dollar. This shift in demand contributed to downward pressure on the Canadian dollar during the period.

2. What does it mean for Embark Funds?

Asset class	Change	Impact on cohorts
Canadian Equities	↓	Moderately negative for younger cohorts with higher equity exposure.
U.S. Equities	↑	Positive for growth-oriented cohorts. Gains were supported by continued demand for large companies despite increased market volatility.
Bonds	↓	Negative for older and more conservative cohorts. Falling bond prices reduced the stabilizing effect typically provided by fixed income holdings.
Money Market	↑	Continued to support capital-preservation strategies. Stable returns helped offset volatility in other asset classes.
Canadian Dollar	↓ CAD	The weaker Canadian dollar modestly benefited portfolios with exposure to foreign assets, particularly those held by growth-oriented cohorts.