Canada’s TSX Gains 29% in 2025, Led by Gold Miners and Banks

• S&P/TSX Composite Index 2025 surged 29%, second-highest annual gain this century with 63 record highs.

• Materials sector doubled on gold, silver, copper, and palladium strength; financials rose 40%.

• Banks exceeded earnings forecasts by 2%; rate cuts and eased U.S. tariffs fueled steady recovery from April lows.

S&P/TSX Composite Index 2025 performance: 29% gain, 63 highs amid miner boom and bank strength. Explore how tariffs eased to drive Canada’s market rally. Stay ahead of 2026 trends now.

What was the S&P/TSX Composite Index performance in 2025?

The S&P/TSX Composite Index 2025 performance marked a stunning turnaround, closing the year with a 29% gain—the second-strongest annual result this century, surpassed only by 2009’s 31% jump. From an April low, it climbed over 40%, hitting 63 all-time highs, most in the last seven months. Key drivers included resilient miners, robust banks, and supportive rate cuts.

How did early 2025 tariffs impact Canadian markets before the reversal?

Early 2025 brought severe challenges as U.S. President Donald Trump imposed the harshest tariffs since the Great Depression, slowing trade and heightening political tensions, including talk of annexing Canada. The S&P/TSX Composite Index plummeted, reflecting immediate market stress. However, as Trump eased the most damaging tariffs and Mark Carney assumed the role of prime minister, tensions subsided, paving the way for recovery. Philip Petursson, chief investment strategist at IG Wealth Management, described the subsequent rally as “jaw-dropping” yet balanced, with potential for 2026 continuation.

Frequently Asked Questions

What drove the S&P/TSX Composite Index 2025 rally in materials and financials?

The materials subindex doubled, propelled by record highs in gold, silver, copper, and palladium amid global demand and trade uncertainties. Financials surged 40%, with Canada’s Big Six banks exceeding Bloomberg consensus earnings by 2 percentage points on average, aided by lower rates and improved loan books. Technology contributors like Shopify and Celestica added significant weight.

Will the TSX miners and banks sustain momentum into 2026?

Rate cuts by the Federal Reserve—three in 2025 and two expected in 2026—bolstered non-yielding assets like precious metals. Philip Petursson notes strong fundamentals persist, though extrapolation from 2025 gains would be unwise. Craig Basinger of Purpose Investments cautions on bank valuations at a 15 price-to-earnings ratio versus 9.7 in 2022, while oil lags.

Key Takeaways

• Historic Rally: S&P/TSX Composite Index up 29% in 2025, 63 all-time highs after tariff relief.
• Sector Leadership: Materials doubled on metals; financials at 33% index weight rose 40% on earnings beats.
• Cautious Outlook: Watch valuations and oil; global capital eyes TSX for diversification in 2026.

Conclusion

Canada’s S&P/TSX Composite Index 2025 performance transformed early despair from tariffs into a 29% triumph, powered by miners in gold and silver, dominant banks, and rate relief. Sources like IG Wealth Management highlight its balanced strength and radar appeal to global investors. As 2026 approaches further Fed cuts and trade dynamics, the TSX positions for continued relevance—monitor key sectors closely for emerging opportunities.

S&P/TSX Composite Index 2025: From Tariff Lows to Record Highs

The benchmark index’s path reflected broader economic resilience. Starting the year under pressure from U.S. trade policies, it bottomed on April 8 before embarking on a methodical 40% ascent. No single frenzy defined the move; instead, steady gains across sectors built the historic 29% result.

Materials shone brightest, with the subindex doubling as precious metals captured safe-haven flows amid European and Middle Eastern conflicts. Gold and silver set fresh records, while copper and palladium benefited from industrial demand. Philip Petursson emphasized that metals’ support could endure, albeit moderated.

Financial Sector Backbone and Emerging Concerns

The financials group, comprising 33% of the TSX, advanced nearly twice as much as U.S. counterparts. Toronto-Dominion Bank and Bank of Montreal led, posting adjusted annual earnings above expectations. Lower rates in both nations spurred dealmaking and reduced loan loss provisions.

Yet, strategists urge vigilance. Craig Basinger warns that banks’ elevated valuations signal caution as tariffs’ economic drag materializes. “Gold and energy do not care about the domestic economy,” he noted. “Banks probably should.” The sector’s price-to-earnings ratio climbed to 15 from 2022’s 9.7.

Oil and gas underperformed despite index records, grappling with oversupply and weak demand. Early-year investments there proved contrarian and unrewarded. Basinger sees limited upside persisting.

Global Context and Investor Appeal

Petursson views the TSX as increasingly attractive for diversification beyond the U.S., alongside Asia and Europe. “If the TSX was not on their radar, it is now,” he stated. Expected 2026 rate cuts should sustain precious metals, though oil leverage remains a wildcard to the upside.

The index’s broad participation—miners, banks, tech—underscores a healthy rally, not overly reliant on one area. Shopify and Celestica contributed 11% to the gains, blending growth with stability. This setup positions Canada for measured progress amid global uncertainties.