# TSX flat as Canada inflation spikes and Fed rate bets rise

**Published:** 2026-06-23T17:57:07.176Z  
**Topic:** Inflation  
**Sentiment:** neutral  
**Publisher:** TrendWatcher — https://www.trendwatcher.in/article/07f00d32-e013-430f-975e-2f983a110e92

TSX holds steady after Canada’s CPI jumps to 3.2% and traders price in two Fed hikes, pushing gold down and the dollar up.

The S&P/TSX composite was unchanged at 12:24 a.m. New York time after Canada’s annual inflation accelerated to a 29‑month high of 3.2% and market participants began pricing in two Federal Reserve rate hikes【1】.  

| At a glance | |
|---|---|
| TSX level | 35,002.18 (flat) |
| Canada CPI | 3.2% (29‑month high) |
| Fed hike odds | Two hikes priced in (CME FedWatch) |
| Gold price | –≈2% as dollar hits 1‑year high |

## Inflation surprise and Fed expectations  
Canada’s consumer‑price index rose to 3.2% year‑over‑year, the fastest pace since the 29‑month run‑up, exceeding most analysts’ forecasts. The surprise adds pressure on the Bank of Canada, which had just a week earlier seen its regulator lower capital requirements to spur lending. In the United States, the Fed’s latest meeting left most policymakers signaling at least one more rate increase this year; subsequent commentary on inflation risks tied to the Iran‑related energy spike has led traders to price in a second hike, according to the CME FedWatch tool【1】.

## Market reaction across assets  
The higher‑than‑expected Canadian inflation and the hawkish Fed outlook weighed on the resource‑heavy TSX futures, keeping the index flat despite a 0.4% gain the day before. Gold prices fell nearly 2% as the U.S. dollar surged to a one‑year high, a move that typically drags down the commodity‑laden Canadian market【1】. The Dow held modest gains while the Nasdaq and S&P 500 were pressured by a broader tech sell‑off, underscoring the mixed sentiment across U.S. equities.

## Corporate and policy backdrop  
In corporate news, Shopify is set to prohibit all vaping products on its platform within days, a response to pressure from U.S. state attorneys general targeting illicit e‑cigarette sales【1】. The policy move adds a non‑inflationary factor to the market narrative but is unlikely to shift the broader index trend in the short term.

## What to watch  
- Upcoming U.S. inflation data (core CPI) due later this week, which could refine Fed hike expectations.  
- Bank of Canada’s next policy decision, where the inflation surprise may influence the timing of any rate change.  
- Gold price movements and the dollar index, as they continue to impact the commodity‑sensitive TSX.

The TSX’s flat performance highlights how a hotter‑than‑expected Canadian inflation reading, combined with growing expectations of tighter U.S. monetary policy, can neutralize momentum in a resource‑driven market. The next set of inflation and policy signals will determine whether sentiment stays muted or turns more decisive.

## Sources
1. Investing.com — [TSX flat as hot inflation, Fed bets impacting sentiment](https://www.investing.com/news/stock-market-news/tsx-futures-fall-as-hot-inflation-fed-bets-batter-sentiment-4754902)
2. Investing.com Canada — [TSX gains as U.S. consumer inflation eases lifting rate-cut hopes](https://ca.investing.com/news/stock-market-news/tsx-futures-decline-ahead-of-crucial-us-inflation-reading-4458159)

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Cite as: TrendWatcher, "TSX flat as Canada inflation spikes and Fed rate bets rise", https://www.trendwatcher.in/article/07f00d32-e013-430f-975e-2f983a110e92