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TSX Gains Despite US Market Plunge

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  Published in Stocks and Investing on Tuesday, February 24th 2026 at 5:01 GMT by Toronto Star
      Locales: CANADA, UNITED STATES

TORONTO, February 24th, 2026 - The Toronto Stock Exchange (TSX) demonstrated surprising resilience today, posting modest gains while U.S. equity markets experienced a significant downturn. The TSX Composite Index closed at 20,354.77, up 24.73 points, a performance sharply contrasting with the negative sentiment south of the border.

The Dow Jones Industrial Average plummeted 394.82 points to end the day at 38,278.17, and the S&P 500 shed 41.31 points, finishing at 4,897.75. This divergence in performance highlights a growing disconnect between the Canadian and U.S. economies, driven by differing economic pressures and sector strengths.

"It's been a decidedly mixed day for North American markets," commented Robert Gibson, Director of Research at Capital Economics. "The TSX managing gains in the face of U.S. declines is notable. We're seeing a clear indication of localized economic drivers at play."

Energy Sector Leads Canadian Gains, Despite Oil Price Dip

Interestingly, the Canadian gains were largely propelled by the energy sector, despite a concurrent decline in oil prices globally. This seemingly paradoxical performance suggests investor confidence in the long-term viability and strategic positioning of Canadian energy companies. Analysts point to increased efficiency in extraction, proactive investment in renewable energy technologies by major players, and a generally more stable regulatory environment as contributing factors.

"While lower oil prices would typically dampen enthusiasm for energy stocks, Canadian companies appear to be weathering the storm effectively," Gibson explained. "We're seeing a focus on profitability and shareholder returns, even in a challenging commodity price environment. They've demonstrated an ability to adapt and optimize operations."

Canadian Earnings Reports Provide Boost

Positive earnings reports from several key Canadian corporations further bolstered the TSX. Toronto-Dominion Bank (TD) exceeded expectations, reporting higher-than-anticipated profits, signaling strong performance within the financial sector. Canadian Imperial Bank of Commerce (CIBC), BCE Inc. (telecommunications), and Nutrien (fertilizers) also released earnings reports today, painting a generally positive picture of Canadian corporate health.

These earnings releases contributed to investor confidence, reinforcing the notion that Canadian businesses are effectively navigating current economic headwinds. The strength of the Canadian financial sector, in particular, is seen as a stabilizing force in the overall economy.

US Inflation Fears Fuel Market Sell-Off

Across the border, U.S. markets are reeling from a recent economic report indicating that inflation remains stubbornly high. This data has dashed hopes for swift interest rate cuts by the Federal Reserve, leading investors to anticipate a prolonged period of higher borrowing costs.

"The core concern for U.S. investors is the persistence of inflation," Gibson stated. "The market is now pricing in a scenario where interest rates remain elevated for longer than previously expected, which naturally puts downward pressure on stock valuations."

This heightened sensitivity to inflation stems from concerns about its potential impact on corporate earnings and consumer spending. Higher interest rates increase the cost of capital for businesses, potentially slowing investment and hiring. Simultaneously, consumers face increased borrowing costs and reduced disposable income, which could dampen demand.

The Federal Reserve is widely expected to maintain its current interest rate policy at its next meeting, but the possibility of further rate hikes has not been completely ruled out, keeping investors on edge. The US central bank is walking a tightrope - attempting to curb inflation without triggering a recession.

Canadian Dollar Weakens Slightly

The Canadian dollar experienced a slight decline, trading at 74.26 US cents, down 0.14 cents. This modest depreciation reflects the broader risk-off sentiment in global markets and the relative strength of the US dollar, which often benefits during periods of economic uncertainty.

Looking Ahead

The contrasting performance of the TSX and U.S. markets suggests a potential decoupling of the two economies. While the U.S. grapples with persistent inflation and the implications of higher interest rates, Canada appears to be demonstrating greater resilience, driven by a strong energy sector, positive corporate earnings, and a comparatively stable economic environment. Investors will be closely watching future economic data releases and central bank announcements to gauge the trajectory of both markets.