The Federal Reserve raised its policy rate for the first time since 2023 on September 16, moving to a 3.75 to 4.00 percent range under new Chair Kevin Warsh. Markets had positioned for a hold, and the TSX Composite had already fallen 3.6 percent from its August 27 high in the weeks beforehand. The index recovered most of that decline within a single session, while the VIX stayed near its historical average even with an active regional oil conflict underway.
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The Bank of Canada held its policy rate at 2.25% for a seventh straight time, yet Canadian yields rose as United States yields surged.
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The index fell for the month even though Brent crude gained and the Strait of Hormuz stayed shut, because rising United States bond yields outweighed oil and gold.
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