6 mins
Stock markets and the economy

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May 2023 - Tech stocks soar

The debt-ceiling negotiations in the United States created new uncertainties for the country’s economy, which is already facing a growing risk of recession. The possible slowing of the U.S. economy weighed on the global growth outlook, particularly in Europe. As for Asia, China’s economic recovery continued to disappoint. Only technology stocks, buoyed by the frenzy over artificial intelligence, posted significant gains during the period.

Variation vs
Variation vs
Interest rate in Canada (%)
Key rate 4.50 0.00 0.25
Commodities ($ US)
Oil (WTI) $68.09 -11.3% -15.4%
Gold $1,963.90 -1.7% +8.4%
EUR / CAD 1.45 -3.0% +0.4%
JPY / CAD 0.01 -2.3% -5.3%
USD / CAD 1.36 +0.2% +0.4%

Sources : Banque du Canada, Fundata


-4.9% (S&P/TSX Composite 31-05-2023)

The Canadian market closed out the month with its worst year-to-date performance. The S&P/TSX Composite Index returned -4.9%, with all sectors ending lower, except Information Technology. Financials especially suffered when the results of the major Canadian banks came in below market expectations. 

Even so, still-resilient economic data prompted investors to readjust their expectations of rate hikes by the Bank of Canada. The bond market suffered from the new expectations, and the FTSE Canada Universe Bond Index finished the month with a return of -1.7%.


0.7% (S&P 500 31-05-2023 in CAD)

Despite the debt-ceiling crisis, the S&P 500 Index ended the month with a return of 0.4% in U.S. dollars and 0.7% in Canadian currency, driven by the performance of Information Technology, Communication Services and Consumer Discretionary. These sectors are highly exposed to U.S. Big Tech, which all month long benefited greatly from enthusiasm over the development of artificial intelligence. Conversely, Health Care, Financials and Energy were the sectors that detracted the most from the return.


-5.5% (MSCI Europe 31-05-2023 in CAD)

After a remarkable start to the year, the European market struggled in May. The MSCI Europe Index closed the month with a return of -2.8% in local currencies. The losses were accentuated by the Canadian dollar’s strength against the euro and the pound sterling in particular. The return was therefore -5.5% in Canadian dollars. As with the North American markets, the Information Technology sector posted gains during the period, but they were offset by declines in the Consumer Staples, Financials and Energy sectors. 


-0.8% (MSCI Asia-Pacific 31-05-2023 in CAD)

The Asian market ended the month with a return of 0.3% in local currencies, as measured by the MSCI All Country Asia Pacific Index. Currency fluctuations were not favourable, resulting in a return of -0.8% for Canadian investors. All sectors posted losses in May with the exception of information technology and manufacturing.


-1.4% (MSCI Emerging Markets 31-05-2023 in CAD)

China’s impact was again felt in emerging markets. The return in local currencies was -1.0%, as measured by the MSCI Emerging Markets Index, and -1.4% in Canadian dollars. Despite the Chinese market’s poor return, Taiwan and South Korea contributed positively during the month, as did Information Technology. Consumer Discretionary and Communication Services were the main detractors.

Reading in progress:May 2023 - Tech stocks soar


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