The price of oil served as a barometer: Amid widespread nervousness over geopolitical developments, it surged by more than 20% between the end of May and June 20, only to fall by about 14% in a few days. At month-end, the oil price had risen by about 7%.
In this volatile environment, strong corporate earnings, especially in the technology sector, and hopes of rate cuts in the United States helped shore up investor confidence. Despite the fragile economic climate, the world’s major equity indexes ended the month in positive territory, and some even flirted with all-time highs.
As at June 30, 2025
| Closing 30-06-25 |
Variation 31-05-25 |
Variation 31-12-24 |
|
|---|---|---|---|
| Key interest rate in Canada (%) | |||
| Key interest rate in Canada (%) | 2.75 | 0.00% | -0.50% ▼ |
| Oil (WTI) | |||
| Oil (WTI) | $65.11 | 7.1% ▲ | -9.2% ▼ |
| Gold | |||
| Gold | $3,303.14 | 0.4% ▲ | 25.9% ▲ |
| EUR/CAD | |||
| EUR/CAD | 1.60 | 2.6% ▲ | 7.1% ▲ |
| JPY/CAD | |||
| JPY/CAD | 0.01 | -1.1% ▼ | 3.1% ▲ |
| USD/CAD | |||
| USD/CAD | 1.36 | -0.8% ▼ | -5.3% ▼ |
Sources: Bank of Canada, Bloomberg Finance L.P.
CANADIAN MARKET
2.9% (S&P/TSX Composite 30-06-2025)The S&P/TSX Composite Index advanced by 2.9% in June, led by financials, energy and materials. Only consumer staples ended the month lower. Even so, this performance occurred in a still-fragile domestic context. Growth remained weak, the unemployment rate reached 7.0%1 in May and the prospect of U.S. tariffs continued to cast a shadow over the country’s economy.
As for the bond market, the FTSE Canada Universe Bond Index ended the month almost unchanged, with a negligible gain of 0.1%. Even so, the index was up and down during the month in an economy that is hard to read and has an uncertain interest rate outlook. The Bank of Canada held its key rate at 2.75% in response to slowing consumption and persistent core inflation, which dampened hopes of immediate monetary easing.
U.S. MARKET
4.3% (S&P 500 30-06-2025 in CAD)U.S. equities staged a solid rebound in June. The S&P 500 Index advanced 5.1% in U.S. dollars and 4.3% in Canadian dollars and even briefly surpassed the record high it had reached in February. The recovery was due mainly to strong performances by information technology and communication services, driven by enthusiasm for artificial intelligence. Moreover, signals from the Federal Reserve suggesting two possible rate cuts by year-end also fuelled optimism in the markets. Finally, the ceasefire announced between Israel and Iran dispelled fears of an oil shock, while progress in trade talks, particularly between the United States and China, also buoyed investor confidence.
INTERNATIONAL MARKETS
1.4% (MSCI EAFE 30-06-2025 in CAD)The MSCI EAFE Index returned 1.4% in Canadian dollars but only 0.2% in local currencies.
In Europe, the European Central Bank cut its key interest rate early in June, but the effect on the markets was limited. The Continent’s indirect exposure to geopolitical tensions as well as ongoing uncertainty about global demand continued to weigh on stock market momentum. Even so, the French stock market stood out as the main driver of gains. Its performance was due mainly to solid performances by large industrial and financial companies, which benefitted from the partial economic recovery and a degree of optimism on the trade front.
In Japan, the central bank maintained its ultra-accommodative policy, leaving rates unchanged even though inflation rose slightly.
EMERGING MARKETS
5.3% (MSCI Emerging Markets 30-06-2025 in CAD)Emerging markets outperformed in June, advancing 5.3% in Canadian dollars and 5.0% in local currencies. The increase was due mainly to the strength of Asian markets, particularly Taiwan, South Korea and China, whose semiconductor giants benefitted from renewed global interest in artificial intelligence.
In China, better-than-expected retail sales somewhat allayed concerns about real estate and manufacturing. Trade talks, particularly the negotiations between the U.S. and China, also supported investor sentiment and boosted momentum in emerging markets.
