North American equity markets reached record highs in August despite a challenging month as US-Canada trade talks stalled and fresh tariffs surfaced. With no trade breakthrough in sight, analysts now worry about near-term economic outlook uncertainty and what it means for markets. That said, Q2-2026 economic indicators out of Canada were resilient with Canada’s annualized GDP growth rate at 3.3%, while the US printed 1.5% (a slower rate compared to 2.1% in Q1-2026). Inflation on other hand remained above target on both sides of the border as the resurging US-Iran conflict worsens outlook.

The S&P/TSX gained 3.1% in August, while the S&P 500 gained 1.5%, bringing year-to-date total returns to 16.0% and 14.4%, respectively. The Russell 2000 index, a measure of US small capitalization stocks, gained 0.9% in US dollars but was down -0.2% in Canadian dollars. Despite a mixed macroeconomic backdrop, equity markets in Canada surged, thanks to favorable gold prices which supported the materials sector, while the US market was buoyed by strong corporate earnings in large cap stocks. The risk-on sentiment was also evident in international markets as the MSCI EAFE index gained 0.8% and MSCI EM IMI index advanced 2.9%.

Fixed income markets showed mixed results. The Bloomberg Global Aggregate Bond Index returned +0.1% in US dollars but fell 0.7% in Canadian dollars., while the FTSE Canada Universe Bond declined by 0.2%. The decline in Canada’s fixed income market stemmed from increase in long-term yields due to rising inflation expectations and higher government bond yields.

Commodity markets were bullish. Gold rallied by +13.3%, supported by strong investor flows, a weaker U.S. dollar and heightened economic and geopolitical uncertainty.

From a currency perspective, the Canadian dollar appreciated approximately 1.2% against the U.S. dollar during the month, weighing on unhedged U.S. dollar exposures; however, the Fund’s partial currency hedge helped mitigate this impact.

Against this backdrop, the Balanced Fund returned 0.3% for the month. The Equity Fund returned 0.6%, while the Bond Fund returned -0.2%. The Money Market Fund returned 0.2%.

Disclaimer

The information contained in this market summary is provided for general informational purposes only and is intended to help CSS Pension Plan members understand recent market conditions and the performance of CSS funds. It does not constitute investment advice, and should not be relied upon as the basis for any investment decision.

As a defined contribution plan member, the value of your account and the appropriateness of any particular investment option will depend on your individual financial situation, retirement goals, time horizon, and risk tolerance. Past fund performance is not indicative of future results.

Nothing in this summary should be construed as a recommendation to buy, sell, or hold any investment, or to change your current contribution or investment directions.

If you have questions about your personal account or would like to discuss your individual circumstances, we encourage you to contact a CSS Retirement and Pension Advisor. Our advisors are available to provide guidance tailored to your specific situation.