Morning Markets for Thursday, Feb. 26, 2026

Key Concepts

• CIBC, TD Bank, GILDAN: Canadian companies reporting strong Q1 earnings, with CIBC hitting record highs.
• NVIDIA: Tech stock experiencing volatility despite strong earnings, driven by AI concerns and competition.
• Canada-US Trade Relations: Increasing pressure from the US for increased tariffs and reshoring of industries.
• Canadian Banking Sector: Demonstrating resilience and strong performance despite economic concerns.
• AI Impact: Debate surrounding the disruptive potential of AI on various sectors, including tech and engineering.
• TSX & S&P 500/NASDAQ: Diverging market performance, with the TSX reaching record territory while the NASDAQ faces downward pressure.
• Trade Missions & Diplomacy: Prime Minister’s trade mission to India, Australia, and Japan, and the complexities of Canada-India relations.

Market Overview & Bank Earnings (First Segment)

The broadcast began with an overview of market activity. CIBC shares reached a record high following better-than-expected first-quarter results. Profit exceeded estimates, with record revenue across all units and higher returns on equity. This marks the second consecutive year CIBC has surpassed expectations, reflecting the broader banking sector’s strong growth. TD Bank also reported a profit exceeding estimates, with revenue up 18% year-over-year, boosted by record revenue in Canada (driven by loan and deposit growth), wealth management, and a decline in provisions for credit losses.

GILDAN, however, experienced a 5.88% stock decline despite beating sales and profit estimates, due to disappointing 2026 targets and a decline in net income. Despite this, GILDAN reports strong North American demand, with innerwear sales nearly tripling year-over-year.

The TSX was up 0.42%, reaching record territory, largely driven by bank performance. The US markets were mixed: the Dow Jones Industrial Average was up 0.14%, while the S&P 500 was down 0.77% and the NASDAQ was down 1.5%, significantly impacted by NVIDIA’s performance.

US Trade Pressure & Canada-India Relations (Second Segment)

According to US President Trump’s trade representative, Canada must agree to increased tariffs and assist in reshoring American industries as part of any potential trade agreement. Prime Minister Mark Carney did not watch the State of the Union address but acknowledged the importance of the American market and the existing low tariff rate Canada currently pays. The US aims to reduce dependence on countries like China and Canada for manufacturing, particularly in the automotive sector. Canada is actively diversifying its trade relationships, exploring investments from Korea, Germany, and China.

CTV’s Mike LeCouteur reported on the situation, highlighting the US administration’s view that all countries pay a “price” for access to the US market. The US has 50% levies on steel and aluminum and 25% tariffs on autos. The Canadian government is in contact with its US counterpart, with a potential in-person meeting scheduled in the coming weeks. Dominic LeBlanc’s office offered a more reserved statement, indicating ongoing informal exchanges.

Bank Performance Analysis (Third Segment)

Brian Tays, CIO and Portfolio Manager at Avenue Investment Management, commented on the banks’ strong performance, contrasting it with the perceived weakness of the Canadian economy. He emphasized the resilience of the Canadian banking system and the diverse performance of its business segments. He noted that concerns about a real estate slowdown haven’t materialized and that banks have successfully navigated the mortgage renewal cycle following low interest rates during the COVID-19 pandemic. He expressed confidence in the banks’ ability to continue performing well, citing strong capital ratios and diversified business lines.

Tays highlighted National Bank as a standout performer, praising its successful integration of acquisitions (Canadian Western Bank and Laurentian Bank) and its high return on equity. He noted the banks’ ability to manage credit risk effectively, with loan losses remaining within expectations.

Tech Sector Volatility & NVIDIA (Fourth Segment)

Jonathan Corpina, Senior Managing Partner at Meridian Equity Partners, discussed NVIDIA’s earnings report and the market’s lukewarm response. While NVIDIA beat top and bottom line estimates, concerns about future capital expenditures and increasing competition contributed to a stock decline. He noted the uncertainty surrounding NVIDIA’s access to the Chinese market and the broader volatility in the tech sector.

Salesforce was an exception, experiencing a positive movement due to a $50 billion share buyback and a raised quarterly dividend. Corpina also touched on the ongoing negotiations between Paramount, Warner Brothers, and Netflix, highlighting the complexities and potential antitrust hurdles.

WSP Global & AI Impact (Fifth Segment)

The segment shifted to WSP Global, an engineering firm experiencing a sell-off despite a record backlog and strong cash flow, attributed to broader AI-related market concerns. Jonathan Goldman, Analyst at Scotia Capital, argued that the sell-off was overdone, emphasizing WSP’s strong backlog (representing 11 months of work) and its proactive approach to integrating AI into its services.

Goldman explained that WSP is focusing on how AI can add to its services, rather than replace them, and has a unique partnership with Microsoft for AI development and deployment. He also highlighted the benefits of WSP’s acquisition of TRC, particularly its exposure to the growing power and energy sector driven by AI and data center demand. He emphasized the importance of liability and trust in the engineering sector, suggesting that a complete outsourcing of design work to AI is unlikely.

Trade Mission & Political Commentary (Sixth Segment)

Jeremy Cheryl of CTV News reported on Prime Minister Mark Carney’s upcoming trade mission to India, Australia, and Japan. The trip will focus on trade, defence, critical minerals, and clean energy. The India leg of the trip is particularly significant, as Canada is working to reset diplomatic relations following previous tensions. A senior government official downplayed concerns about potential Indian interference in Canadian democracy, a departure from previous statements.

Cheryl also reported on Conservative Leader Pierre Poilievre’s speech to the Economic Club, where he is expected to address Canada-US trade relations, a topic he largely avoided during the last election.

Conclusion

The broadcast concluded with a recap of market activity and a preview of upcoming segments. The overall tone was one of cautious optimism, with the Canadian banking sector demonstrating resilience despite broader economic concerns. The tech sector, particularly NVIDIA, faced volatility due to AI-related anxieties, while Canada navigated complex trade relations with the US and prepared for a significant trade mission. The broadcast highlighted the interplay between economic data, political developments, and market sentiment.