Market Recap: U.S. and Canada

Mixed signals in major markets this week, with a sharp mid-week selloff which tested investor nerves before a strong recovery took hold. The Nasdaq 100 and S&P 500 both fell close to 2% below where they started by Wednesday, then reversed sharply through Thursday and Friday to close near their highs for the week. The Dow and TSX followed the same pattern but with less violent swings, and the Dow was the only major index that didn't fully claw back into positive territory by Friday's close.

As for the numbers, the Nasdaq 100 led the way with a weekly gain of 1.69%, followed by the S&P 500 at 1.23%. The TSX squeezed out a small gain of 0.11%, and the Dow Jones was the lone decliner, down 0.50% on the week.

Major Economic Stories | At a Glance

Services Sector Holds Its Pace As Hiring Finally Turns A Corner

The U.S ISM Services PMI slipped to 54.0 in June, down half a point from May's 54.5 and right in line with what economists expected, now the 24th straight month of expansion. Business activity and new orders cooled from spring's stronger pace, but the standout was hiring, which grew for the first time in four months after three months of contraction.

• Industries growing: 13 of 18, led by arts and entertainment, retail trade, and finance and insurance

• Commodities in short supply: 9, up from 5 in May, all tied to data centre construction

• Prices Index: 67.7%, its lowest reading in four months

• GDP signal: June's reading corresponds to a 1.9% annualized GDP gain, per ISM's own model

US Home Sales Slip As Prices Hit A Fresh Record

Existing home sales fell 2.4% in June to an annualized pace of 4.09 million units, coming in below the 4.20 million economists expected and pulling back from May's upwardly revised 4.19 million. The median home price climbed to a record $440,600, up 1.8% from a year ago, even as the pullback in sales showed just how sensitive buyers remain to mortgage rate swings.

• Year-over-year sales: up 2.8% from June 2025, still a solid print for the month

• Inventory: 1.56 million homes for sale, down 0.6% from May, 4.6 months of supply

• First-time buyers: 33% of June closings, up from 30% a year earlier

• Regional split: only the Northeast posted a monthly gain, up 2.1%, while the South, Midwest, and West all declined

Canada's Jobless Rate Ticks Down To A Six-Month Low

Canada's unemployment rate fell to 6.5% in June, edging below the 6.6% consensus and matching the low last seen in January, as the economy added a modest 18,000 jobs. The employment rate rose to 60.8% and the participation rate held steady at 65.0%, signalling stable, if unspectacular, labour market conditions.

• Youth unemployment: fell 0.7 points to 12.7%, close to recent lows from November and January

• Job-finding rate: 24.3% of unemployed found work between May and June, up from 21.3% a year ago

• Regional divide: Quebec's rate dropped to 5.4%, while Ontario held steady at 7.0%

• Wages: average hourly pay for permanent employees rose 3.7% year over year, ahead of forecasts

TOP INSIGHTS

Data Centre Demand Is Starting To Show Up As Inflation Risk

The commodities now flagged as in short supply in the latest services report are, for the first time, entirely tied to data centre construction. That's a narrow but telling signal: the AI buildout is concentrated enough that it's starting to create localized price pressure even though broader input cost readings are easing elsewhere.

For households, that shows up unevenly, in electricity costs and construction material prices in the regions where hyperscale data centres are clustering, while the rest of the country is seeing calmer pricing. For markets, it's a reminder that AI capital spending is now large enough to move real economic indicators.

Here's what I'm watching: whether or not that short supply list keeps growing through the summer. If it does, it tells us the AI buildout is outrunning the supply chains meant to support it, and that's a cost that will eventually show up somewhere.

Canada's Job Gains Are Being Rented, Not Owned

Look past the headline and June's job gains were largely concentrated in youth and part-time hiring tied to Canada's co-hosting of the World Cup this summer, while manufacturing and other goods-producing sectors kept shedding workers. That's a two-speed economy where a soccer tournament is doing more heavy lifting than the export sectors that actually build long-term wealth.

For households, that split shows up as more seasonal income for younger workers, but it doesn’t help relieve the pressure on families tied to trade-exposed manufacturing towns. For the Bank of Canada, it complicates the read on whether the labour market is genuinely healing or just riding a temporary event calendar.

My view is this doesn't change the Bank of Canada's decision on July 15, and I still expect a hold. It’ll be interesting to see whether manufacturing keeps losing ground once the World Cup crowds go home this fall, because that's the number that tells us where this economy actually stands.

The Housing Market Is Splitting In Two, And It's Not About Rates

In the U.S., sales above $750,000 climbed nearly 14% year over year, and sales above $1 million jumped 18%. In the same year, transactions under $100,000 actually shrank. That's an uneven cooling: higher earners keep transacting while entry-level buyers get squeezed out entirely.

If you’re a younger or lower-income household, that split means homeownership is becoming less about mortgage rates and more about whether a family already has equity or wealth to draw on. Of note is that about a quarter of June's buyers paid all cash. For policymakers, it's a signal that rate cuts alone aren’t going to fix affordability if the supply actually being built and sold sits at the top of the market.

The question is whether builders start shifting more inventory toward entry-level price points, because right now the incentives all point toward the top of the market, and that's where the growth is showing up.

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TOP STORY
California Pushes Canada To End Its Wine Boycott

• Adam Schiff says the boycott is devastating California winegrowers badly

• Quebec's wine boycott is cutting off a $434 million market

• US wine exports to Canada plunged 78% within one year

• Ontario VQA wine sales jumped 44% over the past year

In the ongoing ‘battle of the booze’ as I call it, California Senator Adam Schiff has taken to publicly pressuring Quebec to reopen its market to American wine. And yes, I can understand his frustration. California wineries are genuinely collateral damage in a tariff fight they had no role in starting. Quebec isn't budging, and neither is Ontario, and officials in those provinces say they won't restock American alcohol until the broader trade war ends. An interesting sidebar to this is what's happening to consumer habits underneath the political standoff: Canadian producers are converting first-time buyers into repeat customers, people who say they aren't going back to American brands even after the shelves reopen. Personally, over the past year and a half our household has found a few gems we would never otherwise have tried.

A Boycott That's Outlasting The Trade War

We’re also seeing even lawmakers who want tariffs gone are separately fighting to get American alcohol back onto Canadian shelves. That's a sign the boycott has outgrown its original purpose and become a stance of its own. Ford has said Ontario won't reconsider until the US drops its tariffs, and that position will probably hold regardless of what happens in the broader trade talks. If Ford reverses course now, it would look like Ontario backing down first, and I’m sure he doesn’t want to be the one who folds.

Congress May Escalate This Into A Formal Trade Fight

Another angle of attack sees New York Congresswoman Claudia Tenney pushing legislation to investigate the boycotts as an unfair trade practice. If that investigation gains real traction, it opens the door to new US tariffs on Canadian goods, and the fight stops being about alcohol entirely.

Read the full story here.

The alcohol boycott has been running for over a year now, long enough to move past politics and start shaping actual buying habits at the register. Whether you've made a conscious switch to Canadian brands or barely noticed a difference, we want to hear where our readers land. Please vote on this week's question:

LAST WEEK’S POLL RESULTS

In last week's poll, I asked what your read was on Jamie Dimon's Toronto visit. The results were lopsided: 76% called it good PR with no real change behind it, while just 24% saw it as a genuine signal of deeper interest in Canada. Thanks to everyone who voted.

READER COMMENTS

Good PR, but No Change

“Our future is not fixed because an American says so. Our future will be our future when we fix it without interference from the place to the south. Our future must be of our planning, our building, and our negotiating with our friends. We are much better off with our close relatives of Europe, for example. We have been trading and working with them for around 150 to 200 years without problems. We do not have to deal with the mentally corrupted American.” - entender1012

HOUSING IN CANADA

Canadian Rents Fall For A 21st Straight Month

• National average asking rent fell to $2,033 in June

• British Columbia and Ontario posted the steepest annual declines

• Atlantic Canada was the only region where rents rose

• Most renters still call high prices their biggest obstacle

Believe it or not, rents keep sliding across most of the country, and the national average is now at its lowest June level in four years. On its face, that sounds like good news for renters, and in some ways it is. But look closer and the relief is uneven: British Columbia and Ontario are leading the pullback, both down more than 5% from a year ago, while smaller markets in the Prairies and Atlantic Canada are actually seeing prices climb. As we just saw in the jobs numbers above, this kind of regional split is becoming the norm across Canada's economy rather than the exception.

The Two-Track Rental Market Is Here To Stay

Purpose-built apartments are falling in price much more slowly than condos, which dropped nearly 7% as investor-owned units flood the market. That gap confirms another big story, which is that overbuilding in the condo segment is driving most of the decline. Broader rental demand still looks intact, which matters more for where prices head next than this month's headline number does.

Falling Rents Haven't Translated Into Relief Yet

CMHC's own mid-year update found vacancy gains are concentrated in newer, pricier buildings, while older and family-sized units remain tight. I'd watch that gap closely. Until it closes, renters searching for affordable, larger units won't feel what the national numbers are telling everyone else.

Read the full story here.

HI-TECH LEGAL BATTLE v1
Apple Sues OpenAI Over Alleged Trade Secrets

• Apple accuses OpenAI of stealing confidential hardware product secrets

• Two former Apple employees are named in the lawsuit

• OpenAI acquired Jony Ive's io Products for $6.5 billion

• The lawsuit could complicate OpenAI's upcoming public stock offerinG

Apple is accusing OpenAI of running a coordinated campaign to obtain confidential information about its unreleased hardware products and are making allegations that go well beyond a few stray leaked files. The lawsuit claims OpenAI's hardware chief used insider knowledge of Apple's internal codenames to recruit talent away, while a former engineer allegedly kept a company laptop and later accessed old colleagues' files after leaving. OpenAI has denied any wrongdoing and says it has no interest in other companies' trade secrets. Not sure about you, but I don't find that denial especially convincing given how specific Apple's claims are. What strikes me most is the timeline: these two companies were partners just two years ago, when ChatGPT was first built into the iPhone.

This Could Reshape The AI Hardware Race Before It Starts

OpenAI has reportedly hired at least ten engineers directly from Apple as it builds a device meant to challenge the iPhone's dominance, and Apple clearly sees that talent pipeline as part of the problem. If Apple wins an injunction, it could force a real redesign of whatever OpenAI is planning to unveil later this year. And a one-year delay in a market moving this fast could be far worse than any damages award.

The Timing Threatens OpenAI's Path To Going Public

Reporting has it that OpenAI is preparing for a highly anticipated IPO, and a messy trade secret case isn’t exactly the kind of legal overhang investors would welcome. We can expect this lawsuit to move through discovery quickly, largely because Apple is seeking a court order forcing OpenAI to stop using its information rather than financial damages alone. In these circumstances, time truly is of the essence.

Read the full story here.

HI-TECH LEGAL BATTLE v2
Meta Appeals Social Media Addiction Verdict

• A Los Angeles jury awarded $3 million in damages

• Jurors also recommended $3 million in punitive damages

• Google's YouTube was also found negligent in the case

• A separate New Mexico jury awarded $375 million against Meta

In other legal news, Meta is formally appealing a Los Angeles jury's finding that its platforms were designed in a way that hooked young users without regard for their wellbeing. The case centred on a young woman who says she became addicted to social media as a child, and the verdict marked the first time a jury has held a platform legally responsible in this way. Meta insists it will keep defending itself and points to its record on teen safety. Complicating Meta’s defences is that including a separate case, two separate juries landed on the same basic finding, in two different states.

This Verdict Could Set The Tone For Thousands Of Cases

Legal experts say this case was the first of its kind to reach a verdict, which means it could serve as a template for the wave of similar lawsuits still working through the courts. How this appeal plays out will likely shape settlement talks in every case still waiting for trial.

Meta Isn't Backing Down, Even With Two Losses In One Week

Meta is appealing both the California verdict as well as another from New Mexico, a signal that it plans to fight the addiction claims on every front rather than negotiate settlements. That strategy carries real risk if appellate courts uphold either verdict, since it could set a costly legal precedent Meta would then be fighting for years.

Read the full story here.

The Relative Strength Indicator (RSI) can provide a signal that suggests a stock is either overbought or oversold.
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