March update
The Markets (as of close February 27, 2026)
The TSX is up 8.1% in February and 8.8% year to date
The S&P is down 0.4% in February and up 0.9% year to date
The NASDAQ is down 2.5% in February and down 1.6% year to date
As information becomes available from our Portfolio Advisory Group on the conflict in the Middle East, I will send out.
From Portfolio Advisory Group (from February 27, 2026)
Despite resilient equity markets, headline-driven uncertainty persisted through February, with tariffs and technology in focus. We discuss these themes, alongside North American corporate earnings trends and the implications for Canadian trade, in more detail below.
Solid Corporate Earnings
As the Q4 2025 earnings season for the S&P 500 draws to a close, the index has achieved its fifth consecutive quarter of double-digit earnings growth. However, the “beat rate”—the share of companies exceeding profit expectations—moderated. In an environment where valuations remain elevated, a narrower gap between reported results and forecasts could leave markets somewhat more sensitive to disappointments or adverse macro shocks.
Earnings results from some Big Tech firms were closely watched as a test of whether heightened AI-linked expectations can be maintained. Investors are increasingly looking for clear evidence that substantial AI investments are translating into tangible returns, amid questions around profit growth visibility and the potential for AI-driven disruption in certain industries. This skepticism was evident when a major AI infrastructure firm recently delivered a “beat and raise”—exceeding revenue forecasts and lifting forward guidance—was met with a subdued market response. Nevertheless, the Big Tech group, broadly speaking, remain supported by durable business models and reliable cash flow generation.
North of the border, Canadian firms are also wrapping up their 2025 reporting season, while major banks reported Q1 2026 results. Bank earnings have been positive, with record profits driven by solid performance across key divisions alongside improved return on equity (ROE). Despite trade and geopolitical uncertainty, consensus estimates for the S&P/TSX Composite Index continue to point toward double-digit earnings growth this year, underpinning a constructive outlook for Canadian equities.
More Tariff Developments
The U.S. Supreme Court struck down some tariffs imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA) last week. The market reaction was largely muted as investors had anticipated both the ruling and efforts by the administration to reinstate tariffs through alternative legislations.
Accordingly, a 10% global tariff on U.S. imports came into effect earlier this week, with the White House indicating that could increase to 15% "where appropriate". Implemented under Section 122, these levies can remain in place for 150 days without Congressional approval. However, Section 122, designed to address balance-of-payments emergencies, is also likely to face legal challenges. Given the current composition of Congress, a vote to extend the tariffs appears unlikely, but the temporary measure provides time for the administration to restructure its tariff policy.
Other legislative pathways, such as Sections 232 and 301, require formal investigations into national security risks or unfair trade practices but tend to offer more durable legal grounding. Still, the Supreme Court’s ruling reaffirmed that presidential authority over tariffs is not unlimited, reinforcing constitutional checks and balances and underscoring that more permanent trade measures require a more rigorous procedural path.
For Canada, the immediate economic impact remains limited. Roughly 90% of Canadian exports to the U.S. continue to flow tariff-free under exemptions within the U.S.-Mexico-Canada Agreement (USMCA). Meanwhile, sectoral tariffs on metals, autos, and other targeted parts of the Canadian economy imposed under Section 232 remain in effect and continue to weigh heavily on certain industries. As such, the scheduled USMCA review in July remains more consequential for Canada’s economic outlook, alongside ongoing efforts to diversify trade and invest in domestic capacity.
Our base case remains that the core agreement framework stays intact, given deeply integrated North American supply chains and the shared economic costs of disruption. That said, we expect negotiations to involve political signaling and sector-specific pressure points that could stoke near-term uncertainty. We are monitoring developments on this front closely.
Takeaway
While markets remain susceptible to shifts in sentiment given elevated valuations and policy uncertainty, strong corporate earnings momentum provides grounds for measured optimism. Trade uncertainty continues to influence business and consumer confidence, but equity markets are primarily driven by earnings over time. Against a backdrop of steady economic fundamentals, we believe maintaining a cautiously constructive stance in portfolios remains sensible.
Wealth Management and Client Events
On February 12, Kim Mason, Executive Vice President and Head, RBC Private Banking Canada, hosted a conversation with Frances Donald, Senior Vice President and Chief Economist, RBC. Frances and Kim discussed the economic outlook for 2026 and addressed topics that are top of mind for our clients in our rapidly-evolving landscape.
If you missed the event or would like to watch it again, the recording is now available for your review:
Economic Insights for 2026 with RBC Chief Economist, Frances Donald
Passcode: CPBUPDATE
Tax packages for registered accounts were mailed out February 19, 2026, and RRSP contributions slips are out now for contributions made in 2025. Any RRSP contributions made from Jan 1 - March 1, 2026, will have the receipt issued 2-5 business days after. Note the deadline for RRSP contributions for the 2025 tax year is March 2, 2026. Tax packages for non-registered accounts started being sent out around February 20, 2026. For clients that have opted for e-tax preference, you will have access to your tax forms 2 to 4 business days prior to the mailing dates.
It's fraud prevention month, please be alert in fraud prevention. Here is a link to Bank Impersonation Scams.
Bank Impersonation Scams: What They Are and How to Protect Yourself - My Money Matters
In the Community
Spencer and I are participating in the Ride for the ‘Ridge fundraiser to raise support and awareness for the Hospitals of Lakeridge Health. On Sunday, May 24, we will be biking 25km throughout Durham Region alongside passionate cyclists, community leaders and health care supporters. This cycling event will fund new state of the art equipment, renovations and clinic upgrades, and research initiatives for the entire Lakeridge Health hospital system. Donations to our team page can be done using the link below. Any and all donations are appreciated.
Spencer recently volunteered to give a presentation to students at the Durham Boys & Girls club as part of a new weekly program focused on financial literacy. During the session, he discussed the fundamentals of budgeting, how to create and maintain your own budget, and why it’s important at all stages of life. Spencer strongly believes in educating students at a young age, as this will help build confidence early and reduce financial stress.
I am volunteering with Hearth Place Cancer Support Centre again this year on the Gala Committee. Our Gala will be held on April 25 this year and the theme is Mardi Gras. Hearth Place is accepting donations for the Gala. There will be a silent auction table and they are looking for bottles of wine for a raffle. If you have anything to donate, please contact Kelly Lumsden at kelly@hearthplace.org or I’m happy to pick up. For more information www.hearthplace.org
Team Notes
We have new team photos! Please see below – thank you to Kelly Mason from Vintage Films for doing such a great job!
Christine will be out of office March 16. In her absence, please contact Spencer at spencer.robertson@rbc.com or (905) 434-2657 for any assistance needed while she is away.
As always, thank you for your business!