Market Insights: Yields Lead, Power Follows

Macroeconomic and Market Developments: 

• North American markets were up this week. In Canada, the S&P/TSX Composite Index fell slightly 0.18%, while in the U.S., the Dow Jones Industrial Average increased by 0.53% and the S&P 500 Index rose by 0.49%. 

• The Canadian Dollar increased slightly this week, closing at 71.88 vs. 71.80 cents USD last week. 

• Oil prices rose this week, with U.S. West Texas Crude closing at US$83.47 vs. US$82.40 last week. 

• The price of Gold rose this week closing at US$4,508 vs. US$4,380 last week. 

• U.S. consumer prices rose 0.1% in July, matching expectations, with headline inflation up 3.4% from a year earlier and core CPI easing to 2.5% annually, while producer prices were unchanged on the month against a consensus expected gain of 0.2%. First Trust noted the reports reduce pressure on the Federal Reserve to raise rates in September. In Canada, headline inflation rose to 3.0% from 2.8% in June, slightly above the 2.9% forecast by economists polled by Reuters, with Statistics Canada attributing the acceleration mainly to gasoline, up 25.7% year-over-year. Core measures held at 1.9% and 2.0% ahead of the Bank of Canada's September 2 decision. 

• Long-dated U.S. Treasury yields drove markets through the week of August 17 to 21, with the 30-year yield reaching 5.34% on Tuesday, August 18, its highest level since 2007. The Treasury announced on Wednesday, August 19 that it would double buybacks of longer-dated debt from $2 billion to at least $4 billion per operation, and Secretary Scott Bessent said the following day that the figure could go higher. Relief proved short-lived, though yields eased again the following week, with the 10-year falling more than seven basis points to 4.625% on Tuesday, August 25. 

• Bitcoin posted its strongest weekly advance in more than three years during the week of August 17 to 21, rising roughly 23% to finish near US$77,000, according to Bloomberg. The move followed the Treasury's buyback announcement rather than any crypto-specific development, with roughly US$4 billion in bearish positions liquidated on August 20 and 21 alone. U.S. spot bitcoin exchange-traded funds drew US$1.92 billion in net inflows over the week, their strongest showing since October 2025. 

• Nvidia reported fiscal second-quarter results on Wednesday, August 26, with revenue of US$96.2 billion, up 106% from a year earlier, and earnings of US$2.22 per share. Guidance of US$106 billion to US$110 billion exceeded estimates, though the gross margin outlook narrowed to between 73.5% and 74.5% on rising memory costs. Chief Financial Officer Colette Kress said capital spending among the five largest hyperscalers should reach US$1.3 trillion next year, up from US$800 billion in 2026. 

• Prime Minister Mark Carney announced on Monday, August 17 a federal agreement with Quebec and Newfoundland and Labrador to upgrade the Churchill Falls Generating Station and develop the Gull Island hydroelectricity project, supported by $10 billion in federal financing. The government valued the combined projects at nearly $70 billion and described them as the largest clean energy investment in North American history. Ottawa also referred the Labrador Trough Clean Power, Critical Minerals and Infrastructure Corridor to the Major Projects Office, accelerating permitting for a region holding significant high-purity iron ore. 

Weekly Diversion:

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Charts of the Week: 

The most pressing question in North American energy is no longer whether the continent can generate enough power, but whether it can build and move enough of it to meet what is coming. First Trust Advisors made that case in its August 20 Three on Thursday, noting that the American Society of Civil Engineers gave U.S. energy infrastructure a D+ in its 2025 Report Card, citing aging transmission lines, congestion in interconnection queues and underinvestment in high-voltage projects. We selected these three charts because together they frame a problem that runs underneath a great deal of what markets are currently pricing, from AI capital spending to the critical minerals and hydroelectric commitments Ottawa announced on August 17.  U.S. electricity consumption was essentially flat from 2005 to 2020 as efficiency gains offset population and economic growth. That equilibrium broke in 2021. What makes this chart worth attention is not the level of demand but the speed at which the forecast itself has been revised: the 2030 projection has moved from 4,413 terawatt hours in the 2022 estimate to 5,729 terawatt hours in the 2025 estimate, an upward revision of 29.8% in three years. Forecasters have been repeatedly wrong in the same direction, which is usually a sign that the underlying shift is structural rather than cyclical.  In 2011, total generation capacity in the United States and China was roughly comparable. The paths have since diverged sharply, with China expanding capacity 266% through 2025 against a 30% increase in the U.S. The single-year figure is the more striking one: China added 543 gigawatts of new capacity in 2025, roughly ten times the 52 gigawatts added stateside. We include this chart not as a geopolitical point but as a practical one, since electricity supply is increasingly an input to industrial competitiveness in the same way that access to capital or skilled labour is.  Nearly 231 gigawatts of net new U.S. capacity is scheduled to come online between 2025 and 2030, with solar accounting for more than 122,000 megawatts and battery storage next at roughly 64,000 megawatts. The detail worth pausing on is First Trust's observation that storage is not generation. A battery holds power produced elsewhere for two to four hours before depleting, making it useful for smoothing solar and wind output but no substitute for the dispatchable capacity of a retiring coal or gas plant. With storage now representing roughly 28% of planned additions and coal set to lose 29 gigawatts, headline capacity figures increasingly overstate how much reliable new supply is actually arriving. 

Sources: First Trust, Statistics Canada, Reuters, Bloomberg, Government of Canada, TD Economics, The Canadian Press, Quartz, TheStreet, Yahoo Finance, CNBC 

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