Oil prices pulled back, easing energy-driven inflation concerns and driving bond yields lower. That decline in yields supported bank shares and the broader index by tempering worries about higher borrowing costs. At the same time, Canadian GDP was flat in the first quarter of 2026, reinforcing expectations that the Bank of Canada will maintain a dovish stance and adding further downward pressure on bond yields.

Among financials, RBC, TD Bank, and BMO each added around 1%. Strength in gold prices also bolstered mining stocks, with Agnico Eagle rising more than 0.5% and Franco-Nevada gaining nearly 1%.

Oil prices have retreated, helping to ease some inflationary pressure. Data released on Thursday showed that both headline and core PCE inflation for the month came in below expectations, although the annual rates remained well above the Federal Reserve’s 2% target, at 3.8% and 3.3%, respectively. Investors currently expect the Fed to leave the federal funds rate unchanged through year-end, though futures markets still assign roughly a 46% probability to a rate hike in December.

Bank shares led the declines, with Itaú, Bradesco, and Santander each losing around 1%. Utilities also came under pressure, as Axia and Sabesp dropped nearly 2%. Petrobras retreated more than 1% as oil prices weakened on renewed optimism over a potential US–Iran peace agreement, after both parties reached a framework deal awaiting approval from US President Donald Trump. Among other notable laggards, Ambev slipped 1.2%, while WEG fell 1%.

April’s reading of 49.2 had pointed to a slight contraction in activity, but May’s surge well above the 50-point threshold suggests a marked improvement in manufacturing and related business conditions in the Chicago area. The move into the 60s range is typically associated with solid demand, stronger order books, and increased production activity.

While the release does not detail the underlying components of the index, the magnitude of the increase implies a broad-based strengthening in sentiment among purchasing managers. The May 2026 figure will likely be watched closely by investors and policymakers as an indicator of the broader U.S. economic and industrial outlook.

Media reports on Thursday suggested that the US and Iran had agreed in principle to a 60-day memorandum aimed at prolonging the current ceasefire and beginning to restore vessel traffic through the Strait of Hormuz, though President Trump has not yet approved the agreement. Energy prices and bond yields declined, providing broad but modest support to equities. Financials and consumer defensive stocks posted cautious gains.

In technology, Microsoft advanced 3% and Oracle climbed more than 6%, with AI software names buoyed by news of a fresh funding round for Anthropic. Dell surged more than 30% after its AI server segment drove an upgrade to its forward guidance. The tech-heavy Nasdaq 100 was on track to end the month up 8%.

Year-over-year retail sales rose 4.1% in April 2026, down from a 4.6% increase recorded in March 2026. Both figures compare each month’s performance with the same period a year earlier, indicating that while consumer spending continues to expand, the pace of growth has edged lower.

The deceleration suggests a slight cooling in consumer demand after a relatively stronger March, and will likely be watched closely by analysts assessing the resilience of household spending and its implications for Chile’s broader economic outlook.

The figures highlight a deepening downturn in the world’s leading copper producer, as the April indicator shows a larger year‑over‑year drop than in the previous month. Both the March and April readings compare each month’s output with that of the corresponding month a year ago, underscoring mounting pressure on Chile’s copper sector at the start of the second quarter of 2026.

The 0.2 percentage point increase suggests that more Chileans were seeking work without success in April, potentially reflecting softer demand across key sectors of the economy. While the rise is not dramatic, it moves the jobless rate further away from full-employment conditions and may heighten concerns about the resilience of Chile’s post‑pandemic recovery.

Analysts and market participants are likely to watch upcoming labor figures closely to assess whether April’s uptick represents the start of a more persistent upward trend in unemployment or a temporary setback in an otherwise gradual improvement of the employment landscape.

The figures are based on annual comparisons, with the current reading measuring April 2026 output against April 2025, while the previous figure reflects March 2026 versus March 2025. The moderation in the contraction suggests some stabilization in industrial activity, though the sector has yet to return to growth, keeping pressure on Chile’s broader economic outlook and industrial exporters. Investors and policymakers will be watching upcoming data closely for signs of a more durable recovery in manufacturing.

The figures are based on a year-over-year comparison, measuring price changes in May 2026 against those in May 2025. Similarly, April’s 3.0% reading reflected the change compared with April 2025. The slight increase suggests inflationary pressures remain present but not yet at levels typically associated with overheating or acute cost-of-living stress.

While no breakdown by category was provided, the move from 3.0% to 3.2% will be closely watched by market participants and policymakers, as it may influence expectations around future price dynamics and potential monetary policy responses if the upward trend continues.

Oil prices pulled back, driving bond yields lower as energy-driven inflation worries eased. This supported banking shares and the broader equity index by tempering concerns over higher borrowing costs. At the same time, Canadian GDP was flat in the first quarter of 2026, following a 0.2% contraction in the final quarter of 2025. The figures reinforced expectations of a dovish stance from the Bank of Canada and exerted additional downward pressure on bond yields. Gold prices also ticked higher, providing a boost to mining stocks.

Gross fixed capital formation fell by 1.1%, marking its first decline in a year. At the same time, GDP came under notable pressure from a 2.9% increase in imports, driven primarily by higher inflows of gold and scrap metal. Exports slipped by 0.1%, despite a spike in oil and gas prices in March following the outbreak of war in the Middle East.

Much of the imported gold, along with manufactured goods, was directed into inventories, which helped prevent a second consecutive quarterly contraction in Canadian GDP. On an annualized basis, Canada’s GDP edged down by 0.1%.

Imports grew at a slower pace, rising 1.9% to $302.1 billion. Higher imports of capital goods (up 5.6%) and foods (up 0.3%) were partly offset by declines in industrial supplies (down 1.9%), vehicles (down 1.5%), and consumer goods (down 1.0%).

Over the January–April period, the goods trade deficit narrowed sharply to $330 billion, compared with $549 billion in the same period of 2025.

The figures are based on a month-over-month comparison, where April’s performance is measured against March, and March’s reading reflects the change versus February. The swing from negative to positive growth suggests that the Canadian economy has regained some traction after a brief setback, hinting at a potentially more stable trajectory as the second quarter unfolds.

The shift from modest positive growth to a marginal decline suggests that Canada’s economy has lost momentum entering 2026. The data compare each quarter’s performance against the corresponding quarter a year before, indicating that the overall level of activity in Q1 2026 was fractionally lower than in Q1 2025, after having still been higher in Q4 2025 versus Q4 2024.

While the scale of the contraction is small, the move into negative territory on a year-over-year basis may heighten concerns about the durability of Canada’s growth trajectory and could factor into expectations for fiscal and monetary policy in the coming quarters.

The shift marks a notable moderation in the pace of inventory accumulation. While March’s 1.5% gain reflected more aggressive restocking from the prior month, April’s 0.5% rise suggests wholesalers may be aligning inventory levels more cautiously with current demand conditions. The month-over-month comparison shows that although inventories are still expanding, the momentum behind that growth has eased heading into the second quarter of 2026.

The data, updated on 29 May 2026, indicate that while Canada’s economy is still fractionally in negative territory, the pace of contraction has nearly ground to a halt. Under the quarter-over-quarter comparison framework, the latest reading reflects a much smaller pullback in activity relative to the previous quarter’s sharper decline, suggesting that the downturn may be bottoming out as 2026 begins.

The indicator, which tracks the overall change in prices for goods and services produced in the economy, suggests that pricing momentum has strengthened marginally compared with the previous quarter. The “actual” measure reflects the price change from Q4 2025 to Q1 2026, while the “previous” figure captures the movement from Q3 to Q4 2025.

Although the pickup is small, the move from 1.00% to 1.10% indicates that underlying price dynamics in Canada are continuing to firm on a quarter-over-quarter basis, and will likely be watched closely by policymakers and markets assessing the trajectory of inflationary pressures through 2026.