Canadian equities have posted a strong first half of 2026 on elevated oil prices and financial-sector gains, and analysts expect that momentum to carry into the second half, largely because the Bank of Canada is likely to hold rates steady, a backdrop favourable to banks, even as unresolved U.S. trade negotiations remain the largest overhang on exporters and the broader economy.
Ben Jang, Portfolio Manager and Head of Fixed Income on our Public Assets team, weighed in on the market's resilience, pointing to strong earnings rather than commodity momentum as the driving force, with financials leading the way. He cautioned, however, that markets may be underpricing the unresolved risks behind the Iran ceasefire, including nuclear inspections, sanctions relief, and shipping traffic through the Strait of Hormuz.
Read more: What’s Next for the Canadian Stock Market? I Morningstar
