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“I think we’ve seen a pretty significant rise in Canadian equities overall,” he said. 

“Generally speaking, when you get ahead of big weeks like next week, with respect to what could happen, with respect to forward guidance on resuming the rate easing cycle in both countries, I’m not surprised that on a Friday, you’re going to see some people take some profits here really across the board. 

“It seems like prudent risk management at this point.” 

Reid is expecting both the Bank of Canada and the Fed to cut interest rates by 25 basis points next week. 

“I think the key for markets — not only equities but across asset (classes) — is really what the forward guidance from both central banks will suggest,” he said. 

“In the U.S., it seems to be that things are slowing, but they’re not slowing at a huge pace and we’re in a bit of a Goldilocks environment here and you can obviously see that from where asset prices trade, from where risk trades, whether it’s credit spreads or equities.” 

Stocks have rallied with expectations that the Fed will cut its main interest rate for the first time this year at its meeting next week. Such a move would give the U.S. economy a kick-start, and mortgage rates have already dropped in anticipation of it.

Expectations for a cut have built as recent reports suggested the U.S. job market could hit the precise balance that Wall Street has been betting on: slowing enough to convince the Fed that it needs help, but not so weak that it will mean a recession, all while inflation doesn’t take off.

Ahead of key rate decisions next week that could lower borrowing costs, Reid said he thinks a move from the Bank of Canada would have less of an impact on Canadian equities compared to a move from the Fed. 

“How U.S. equities perform in the aftermath of the Fed meeting is probably a bigger driver for Canadian equities than whatever the Bank of Canada does,” he said. 

The S&P/TSX composite index was down 124.07 points at 29,283.82.

In New York, the Dow Jones industrial average was down 273.78 points at 45,834.22. The S&P 500 index was down 3.18 points at 6,584.29, while the Nasdaq composite was up 98.03 points at 22,141.10.

The Canadian dollar traded for 72.21 cents US compared with 72.23 cents US on Thursday.

The October crude oil contract was up 32 cents US at US$62.69 per barrel. The December gold contract was up US$12.80 at US$3,686.40 an ounce.

This report by The Canadian Press was first published Sept. 12, 2025.

— With files from The Associated Press.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)