Despite a trade war with the U.S. and concerns of a recession, the Canadian economy was resilient in 2025. This helped the Toronto Stock Exchange (TSX), Canada’s largest stock market exchange, have a stellar year—and has investors increasingly focused on what to expect from the TSX in 2026.
TSX in 2025: Exactly How Well Did It Do?
The TSX started 2025 at 24,727.94 and closed the year out at 31,712.76, finishing the year up 28.3%. Along the way, the index registered 63 closing records. Not only does that represent its second consecutive year of high double-digit gains, but it also makes the TSX the top performing North American index in 2025.
In 2025, the technology-heavy Nasdaq rallied 20.36%, while the S&P 500 advanced 16.4%, and the Dow Jones Industrial Average climbed 12.97%.
In 2025, the TSX, which is dominated by financials (32% of the index), energy (15%), and basic materials (17%) sectors, enjoyed tailwinds from strong gold, silver, copper, and uranium prices, lower interest rates, and rising oil and gas prices.
TSX in 2026: Performance Expectations
In 2026, analysts remain bullish on both Canadian and American stocks—the TSX in particular. However, expectations for 2026 are a little more muted than the last two years, with calls for the TSX to advance anywhere from five percent to 10%.
Keep in mind that stockbrokers tend to be both bullish and conservative. Why? Well, if they were bearish, chances are good that you wouldn’t need to use their services and pay their exorbitant fees. At the same time, they don’t want to be too bullish with their forecasts, because if the markets don’t perform as well, their modelling might not appear accurate.
Despite the cautious approach, financial analysts and fund managers failed to beat the major benchmarks in 2025. So, you have to take their forecasts with a grain of salt.
What is important for investors to focus on with the TSX in 2026—as in all years—is earnings. With all major indices at record levels, stocks are not exactly cheap, though, with interest rates down, the macroeconomic environment is bullish for North American businesses. And that should be good for earnings this year.
If earnings are solid in 2026, the TSX should continue to march higher. If earnings are underwhelming, the index could give up short-term ground. So, a well-balanced portfolio is important, as it can help an investor succeed whether the markets are bearish or bullish.
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