TSX Soars: Canada’s Index Hits 63 All-Time Highs in 2025, Rockets 29% for Second-Best Performance Since 2000

While traditional finance pats itself on the back, a quiet revolution brews.

The Old Guard's Last Hurrah?

Canada's flagship stock index just posted a year for the history books—sixty-three record closes, a blistering 29% annual gain. It's the kind of performance that makes portfolio managers pop champagne and write triumphant year-end letters. A second-best run in over two decades? In the legacy system, that's called a victory lap.

Digital Assets Don't Do Victory Laps

They're too busy building. While centralized exchanges tally their all-time highs, decentralized protocols are engineering the next financial layer—one that operates 24/7, without holiday closures or celebratory press releases. The 29% surge is impressive, until you consider the asymmetric potential simmering on-chain. Traditional markets celebrate milestones; crypto builds the milestones themselves.

The Real Benchmark Isn't 2000

It's tomorrow. A 29% annual return would be a career-defining feat in any conventional fund manager's playbook. Yet in the digital asset space, that's sometimes just a Tuesday. The comparison isn't about belittling a strong year for equities—it's about highlighting a fundamental shift in what constitutes 'performance.' Legacy systems optimize for incremental gains within a closed loop. Crypto redesigns the loop.

So let the traditional ticker tapes fly. The real innovation isn't hitting new highs on a century-old index; it's constructing an entirely new market where the highs are yet to be defined. After all, in the race for financial future, the most bullish signal isn't a record close—it's an open network no one can close.

*A cynical finance jab? Those record highs were likely fueled by monetary policies that would make a crypto algorithm blush with their lack of transparency.*

Markets reverse course after tariffs ease and leadership shifts

Then the pressure cracked. TRUMP stepped back from his most damaging tariffs. Mark Carney, a technocrat with deep financial roots, took over as prime minister. Market stress cooled. Tensions with Washington eased.

What followed surprised almost everyone. Canada’s economy, powered by miners and global financial firms, fit neatly into the disorder of Trump’s trade world.

From an April 8 low, the S&P/TSX surged more than 40%. The climb was steady, not frantic. Over seven straight months, the index kept pushing higher. By year‑end, the math was locked. A 29% annual gain. Sixty‑three records. A historic run.

The rally leaned hard on miners and banks. The materials subindex doubled, lifted by strong moves in gold, silver, copper, and palladium.

The financials sector jumped 40%. Technology also pulled weight. Shopify and Celestica together added 11% to the index’s advance. No single sector carried the load alone.

Philip Petursson, chief investment strategist at IG Wealth Management, summed up the scale of the move. “The numbers themselves are somewhat jaw-dropping,” Philip said by phone. “But you could still argue this is a balanced market with room left in 2026.”

Rate cuts played a major role. The Federal Reserve cut rates three times in 2025. Assets that pay no interest benefit. The central bank is expected to cut twice more in 2026. Precious metals reacted fast. Gold and silver hit fresh records. They also drew demand from traders worried about trade policy and conflicts in Europe and the Middle East.

Philip said metals could keep supporting the TSX next year, though at a slower pace. “It WOULD be foolish to just extrapolate this year’s gains into 2026,” he said. “The fundamentals are still there.”

Banks dominate gains while oil and valuations raise flags

Banks were the backbone of the rally. Canada’s Big Six, including Toronto‑Dominion and Bank of Montreal, beat profit forecasts. Annual adjusted earnings topped Bloomberg consensus by an average of 2 percentage points. Lower rates helped. Deal activity helped. Loan books improved, with fewer reserves set aside.

The financial group, which includes insurers and smaller lenders, makes up 33% of the index. Their advance nearly doubled gains posted by U.S. peers. Lower rates in both the U.S. and Canada fed momentum across the group.

Still, caution is creeping in. Craig Basinger, chief market strategist at Purpose Investments, flagged stretched valuations as tariffs begin to weigh on the economy.

“Gold and energy do not care about the domestic economy,” Craig said. “Banks probably should. This does not feel like the moment to pay premium prices.”

Canada’s banking subindex now trades NEAR a price‑to‑earnings ratio of 15, up from 9.7 in 2022.

Oil offered no help, as its own index hit records despite one of the worst years for crude prices in memory. Demand lagged supply. Craig said buying oil and gas stocks early in the year would have been a contrarian call. The outlook remains muted.

Philip said the TSX could still attract global capital. If oil surprises to the upside, the index offers leverage. He said investors looking beyond the U.S. are finding real options in Canada, Asia, and Europe. “If the TSX was not on their radar,” Philip said, “it is now.”

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