Canada’s main stock index ended modestly higher on Friday, while U.S. markets also closed in positive territory, even as consumer data stoked inflationary fears.
The S&P/TSX composite index was up 61.87 points at 34,471.36, lifted mostly by the tech sector.
“It’s a pretty quiet day. There isn’t a lot of big news that’s driving the markets in Canada,” said Lesley Marks, chief investment officer of equity at Mackenzie Investments.
She said the TSX and loonie brushed off any potential anxiety stemming from Alberta Premier Danielle Smith revealing the province will add a question to its fall referendum on whether Alberta should remain in Canada or if the province should hold a binding referendum on separation.
“People don’t believe it’s actually going to lead to the separation of Alberta from Canada, so they’re not pricing in that expectation into Canadian equities,” Marks said.
The Canadian dollar traded for 72.42 cents US compared with 72.55 cents US on Thursday.
In New York, the Dow Jones industrial average was up 294.04 points at 50,579.70. The S&P 500 index was up 27.75 points at 7,473.47, while the Nasdaq composite was up 50.87 points at 26,343.97.
Marks said growth in the U.S. markets is coming from higher AI-driven earnings as well as hopes there would soon be a resolution to the conflict in the Middle East.
Even as the markets performed well this week, Marks said investors are starting to get more concerned about higher interest rates amid rising inflationary fears as the Iran war keeps the Strait of Hormuz effectively shut. The closure of the crucial waterway has prevented oil tankers from exiting the Persian Gulf to deliver crude to customers worldwide, pushing oil prices higher.
The July crude oil contract was up 25 cents US at US$96.60 per barrel.
“The biggest risk right now is inflation,” Marks said. While a lot of it is coming from high oil prices, she said that’s not the full picture. Hyper growth in the U.S., fuelled by AI investments and capital expenditures, is likely to add to inflation, she added.
In Canada, March retail sales rose 0.9 per cent to $72.7 billion as higher gas prices boosted overall sales for the month, Statistics Canada reported on Friday. Overall retail sales in volume terms fell 0.7 per cent in March.
The agency also provided its preliminary estimate for April retail sales, which it expects rose 0.6 per cent.
“What we’ve seen in the preliminary data is that higher gasoline prices are starting to crowd out the consumer’s more discretionary purchases,” Marks said.
South of the border, meanwhile, a consumer sentiment survey outlined similar weakening sentiment.
A survey of U.S. consumers by the University of Michigan found sentiment fell to a record low, piercing below a bottom in 2022 when inflation peaked above nine per cent. Households are feeling worried about how bad inflation is now because of expensive oil created by the war with Iran.
U.S. consumers are forecasting inflation will worsen to 4.8 per cent in the coming 12 months, up from a forecast of 4.7 per cent last month, according to the survey.
“What you are seeing in the U.S. is, even though stocks are hitting records on a daily basis, the consumer is really feeling the impact of higher gasoline, and that’s impacting their outlook as well as their concerns for inflation,” Marks said.
The June gold contract was down US$19.30 at US$4,523.20 an ounce.
Ritika Dubey, The Canadian Press. With files from The Associated Press.
This report by The Canadian Press was first published May 22, 2026.
