June 2026 Market Recap
Last Month in the Markets: June 1 – 30, 2026
Last Quarter and First Half of 2026
What Happened in June?
The conflicts in the Middle East, including tensions involving the United States and Iran, as well as Israel, Gaza, Lebanon, and other regional groups, continued to influence capital markets around the world. Concerns surrounding the Strait of Hormuz, which carries a significant portion of the world’s crude oil supply, caused oil prices to spike in early April, mid-May, and again in early June.
Since June 3, the price of oil has fallen approximately 30% from its intraday high of $97 per barrel. Oil ended June at roughly the same price level as it was at the end of February.
In June, equity market performance made little contribution to long-term returns. The S&P/TSX Composite Index was nearly unchanged, the S&P 500 declined 1%, the Dow Jones Industrial Average gained 2.5%, and the NASDAQ fell by approximately the same amount as the Dow gained.
American equities delivered exceptionally strong performance during the second quarter. The TSX rose 6%, while the S&P 500 gained 14%, the NASDAQ advanced 14%, and the Dow surged more than 21%.
Year-to-date, the TSX, S&P 500, and Dow have each gained approximately 9%. Despite periods of significant volatility, the NASDAQ has increased by 14% so far this year.
Events that influenced markets in June included:
1. June 5 – Canadian and U.S. Employment Growth Rebounded
Canadian employment increased by 88,000, while the unemployment rate fell by 0.3 percentage points to 6.6%. This marked the first significant employment gain since November 2025. The number of full-time workers increased by 154,000 in May.
In the United States, nonfarm payroll employment increased by 172,000, while the unemployment rate remained unchanged at 4.3%. Employment gains were concentrated in leisure and hospitality, local government, and healthcare, while employment in financial services declined.
While stronger employment figures are generally positive for equity markets, rising employment and inflation can increase the likelihood of higher interest rates. As a result, expectations for future rate cuts declined, while the probability of a rate increase later this year rose.
2. June 10 – Bank of Canada Held Rates Steady Again
The Bank of Canada left its policy interest rate unchanged at 2.25%.
Employment growth has remained uneven, while inflation has increased due to higher energy prices following renewed conflict in the Middle East. In addition, tariffs and ongoing CUSMA negotiations are expected to influence the Bank’s future economic forecasts and interest rate decisions.
3. June 10 – U.S. Inflation Continued to Rise
U.S. consumer inflation accelerated further in May. The Consumer Price Index (CPI) increased 0.5% on a seasonally adjusted basis after rising 0.6% in April.
Over the previous 12 months, the all-items CPI increased 4.2% in May, up from 2.8% in April. Energy prices rose 3.9% during the month and accounted for more than 60% of the overall increase in consumer prices.
The U.S. Producer Price Index (PPI) also continued to accelerate. The annualized rate reached 6.5% in May, representing the largest year-over-year increase since November 2022.
4. June 11 – European Central Bank Raised Interest Rates
In response to rising inflation across the Eurozone, the European Central Bank increased its three benchmark interest rates by 0.25 percentage points.
The Bank stated that its objective remains maintaining price stability and returning inflation to its 2% medium-term target, consistent with the goals of most major central banks.
5. June 17 – Federal Reserve Held Rates Unchanged
Federal Reserve Chair Kevin Warsh announced that the federal funds rate would remain within a target range of 3.5% to 3.75%. This marked Warsh’s first interest rate decision and press conference as Chair.
The Federal Reserve also released an updated Summary of Economic Projections (SEP). While the decision to leave rates unchanged was widely anticipated, the updated projections provided important insights into the future direction of U.S. monetary policy.
The SEP included higher inflation forecasts and removed the previously anticipated interest rate cut from the Federal Reserve’s “dot plot.” Members of the Federal Open Market Committee (FOMC) are now evenly divided between those expecting a future rate increase and those expecting either no change or a rate cut.
This split suggests that higher interest rates could still be possible later this year.
6. June 18 – U.S.–Iran Memorandum of Understanding Took Effect
Following three days of intensive negotiations, the United States and Iran agreed to a Memorandum of Understanding (MOU) aimed at ending hostilities over a 60-day period.
The agreement eased immediate geopolitical concerns and helped stabilize market sentiment.
7. June 22 – Canadian Inflation Rose Above 3%
Canada’s Consumer Price Index increased 3.2% year over year in May, up from 2.8% in April.
This represented the highest inflation reading since late 2023. Gasoline prices rose more than 33% in May and were the primary contributor to the increase in consumer inflation.
8. June 25 – Canadian Employment and Wages Continued to Increase
Canadian payroll employment rose by 22,000 in April. On a year-over-year basis, employment increased by 78,100 positions.
Job vacancies remained near 500,000. Average weekly earnings increased by 1.0% to $1,346 in April and were 3.8% higher than in April 2025.
9. June 25 – U.S. Inflation Exceeded 4% and Import Prices Jumped
The Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures (PCE) Price Index, increased 0.4% in May and was up 4.1% on a year-over-year basis.
Core PCE, which excludes the more volatile food and energy categories, increased 3.4% over the previous 12 months.
U.S. import prices rose 1.9% in May after increasing 2.0% in April and 0.9% in March. Compared with May 2025, import prices were up 6.7%, representing the largest annual increase since August 2022.
Imported fuel prices rose 12.5% during May and have increased 47.0% since February, adding further inflationary pressure to the U.S. economy.
What’s ahead for July and beyond?
The renegotiation of the Canada-United States-Mexico Agreement (CUSMA), the successor to NAFTA, remains uncertain. The U.S. President has expressed reluctance toward a continental trade agreement, and on July 1, the United States officially declined to renew the existing agreement established during President Trump’s first term. Bilateral discussions continue, and negotiations are ongoing to establish side agreements among Canada, the United States, and Mexico.
Progress—or a lack of progress—toward peace in the Middle East will likely continue to affect equity and commodity markets. Energy prices remain a key factor influencing inflation. Rising inflation reduces the likelihood of interest rate cuts, and although crude oil prices have returned to pre-conflict levels, the effects of earlier price increases have not yet fully moved through global supply chains. Inflation is therefore expected to remain elevated before moderating.
Investors continue to look forward to a period when markets are driven primarily by economic fundamentals such as inflation, employment, interest rates, GDP growth, and corporate earnings, rather than geopolitical developments.
