Monthly Portfolio Update October 2026

A lightbulb with a $ filament and dollars at the bottom of the bulb goes on for bulls and bears.

Monthly Market and Portfolio Review

Indexes	Monthly Streak
TSX:	1 – month winning streak
S&P:	1 – month winning streak
DJIA:	1 – month winning streak
Nasdaq:	1 – month losing streak

October was a month of sharply contrasting market performances. The S&P 500 Index (S&P) and Nasdaq Composite Index (Nasdaq) both reached record closing highs early in the month, but a late-month technology sell-off erased most of the S&P’s gains and pushed the Nasdaq into negative territory, its worst month since March 2025. Meanwhile, the Dow Jones Industrial Average (DJIA) and Toronto Stock Exchange Composite Index (TSX) benefited from a shift away from large technology and AI-related companies towards more traditional industries.

Concerns about AI spending, rising oil prices and uncertainty surrounding inflation and interest rates drove much of the change in market leadership.

The biggest source of weakness was growing concern about the enormous sums technology companies are investing in artificial intelligence (AI). After rewarding companies for expanding their AI infrastructure earlier in the year, investors began questioning whether these investments would generate enough revenue and profits to justify their cost.

Those concerns intensified as major technology companies reported earnings and outlined spending plans. Reports from Alphabet (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN) added to investor concerns about the cost and potential returns of AI investments, contributing to a sell-off in technology stocks. Investors also questioned whether companies might need to borrow more heavily to finance their AI ambitions. Semiconductor manufacturers weren’t spared, with Nvidia (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO) both coming under pressure. All seven members of the Magnificent Seven also fell on the final trading day of October, underscoring the breadth of the late-month sell-off among large technology stocks.

Oil prices climbed as geopolitical tensions and supply concerns in the Middle East intensified. Conflict involving Iran and attacks near the Strait of Hormuz heightened fears of supply disruptions. Brent crude finished the month near US$118 a barrel. Higher prices benefited energy producers but also fuelled inflation concerns by increasing transportation and production costs, making interest rate cuts less likely.

US Treasury bond yields added to the uncertainty. The 10-year Treasury yield climbed above 5% early in October, reaching a multi-year high. This put further pressure on growth-oriented stocks, made bonds more attractive to investors and increased borrowing costs. Yields subsequently fell below 5% by month-end, easing some of the pressure on stocks.

The Federal Reserve (Fed) held its benchmark interest rate at 3.75%–4.00% at its October 28 meeting, following September’s increase. The decision wasn’t unanimous, with two policymakers favouring another increase. Persistent inflation and resilient economic growth left investors uncertain about when borrowing costs might fall.

In Canada, the TSX recovered some of September’s losses, although its modest monthly gain masked considerable volatility. Rising oil prices supported energy producers, helping offset weakness elsewhere. However, higher energy costs also added to inflation concerns. September inflation accelerated, largely reflecting higher fuel prices, pushing it above the Bank of Canada’s (BoC) 1%–3% target range. At its October 28 meeting, the BoC raised its benchmark rate by 0.25% to 2.50%, citing persistent inflation pressures and a more resilient economy.

Gold and mining stocks experienced a volatile month. Precious metals initially benefited from safe-haven demand, but higher bond yields and a stronger US dollar subsequently weighed on gold prices. The decline intensified towards month-end, with gold falling sharply on October 30 and dragging mining shares lower.

Although less exposed to large US technology companies, the TSX wasn’t immune to the late-month AI sell-off. Canadian technology shares initially benefited from optimism about AI demand and strong US earnings, but reversed course as selling spread across the sector. Technology and mining shares contributed to the TSX’s sharp decline late in the month.

Ultimately, October was less about investors abandoning stocks altogether and more about becoming selective about where they were willing to put their money. Investors moved away from large technology companies, while Canada’s greater exposure to energy producers helped the TSX hold up better, despite weakness in mining and technology stocks.

Portfolio	Monthly Streak
Portfolio 1:	1 – month losing streak
Portfolio 2:	1 – month winning streak
Portfolio 3:	3 – month winning streak

Like the major indexes, my three portfolios got off to a strong start in October, climbing steadily through the first week before reversing course as concerns about AI spending sent technology stocks tumbling. The shift in market sentiment exposed the differences in their holdings, with the more diversified Portfolio 2 holding up much better than its technology-heavy counterparts. Rising oil prices also provided some support, helping limit the damage.

Despite a strong start, Portfolio 1 had a difficult October, falling 2.3% as sharp declines in major technology holdings outweighed gains elsewhere. Celestica (TSE: CLS), Cloudflare (NYSE: NET), Datadog (NASDAQ: DDOG), Hammond Power Solutions (TSE: HPS.A)and Nvidia were among the biggest drags, with Alphabet and Amazon adding to the pressure towards month-end. There were a few bright spots, including strong gains from Shopify (TSE: SHOP) and CrowdStrike (NASDAQ: CRWD), while Visa (NYSE: V) and Berkshire Hathaway (NYSE: BRK.B) both reached new all-time highs during the month. However, those gains weren’t enough to offset the losses, as the portfolio’s heavy technology exposure proved a disadvantage when investors grew increasingly cautious about the sector.

Portfolio 2 was the month’s top performer, gaining 4.2% and outperforming all four major indexes. After losing ground in September, it returned to the monthly win column, posting gains in three of four weeks. Although it started slowly during the AI rally, its lower technology exposure and greater energy weighting proved advantageous as investors shifted away from technology and oil prices surged. Aritzia (TSE: ATZ) was a standout, surging after beating revenue and profit expectations, while strength across much of the portfolio helped offset weakness in its largest holding, Bank of Nova Scotia (TSE: BNS). This combination helped it weather the late-month sell-off and take the top spot for October.

Portfolio 3 managed a small 0.1% gain, extending its monthly winning streak to three months. Its heavy AI and technology exposure proved to be a double-edged sword. An early rally lifted the portfolio, but much of that progress evaporated as AI and inflation concerns returned and technology stocks sold off. Shopify provided a boost, but Nvidia’s decline limited the upside. Later in the month, Rocket Lab (NASDAQ: RKLB), Cloudflare, Corning (NYSE: GLW) and Vertiv Holdings (NYSE: VRT) all suffered double-digit weekly losses. Fortunately, the early gains were just enough to keep the portfolio in the green, highlighting both the potential rewards and volatility of its concentrated technology exposure.

October was a good reminder that being heavily invested in one or two sectors can be great when stocks in those sectors are soaring, as technology stocks did earlier in the month. But when the trend reverses, it’s not nearly as much fun. While two of my portfolios struggled with the technology sell-off, Portfolio 3 managed to hold on to a small monthly gain, while the more balanced Portfolio 2 weathered the turbulence and outperformed all four major indexes. After a volatile month, I’ll happily take that mix of results and see what November brings!

Monthly Portfolio & Index Performance — Chart 1: **October 2026 Portfolio Performance Compared to Major Market Indexes**
A comparison of the monthly returns of my three portfolios and the major market indexes.

Year To Date

Nine Months YTD Portfolio & Index performance — Chart 3: **2026 Year-to-Date Portfolio Performance Compared to Major Market Indexes**
A comparison of the year-to-date returns of my three portfolios and the major market indexes.

The late-month technology sell-off shook up the year-to-date standings, with the TSX overtaking the Nasdaq to claim the top spot. Helped by higher oil prices, the TSX finished October with a gain of 14.4%, narrowly ahead of the Nasdaq at 14.2%. The Nasdaq was the only index of the four to see its year-to-date return decline during October, giving up some of the ground it had built earlier in the year. The S&P improved to 13.1%, but slipped into third place, while the DJIA posted the biggest improvement during the month, climbing to 9.2%. Despite that gain, it remained in fourth place.

With just two months left in the year, the race is far from settled. Much may depend on what happens with AI-related stocks. A renewed rally could put the Nasdaq back in contention for the top spot, while continued weakness in technology stocks could give the TSX an opportunity to hold onto its lead.

The technology sell-off also reshuffled the standings among the three portfolios. Portfolio 1 slipped from first place to second, with a year-to-date gain of 19.6%. Taking advantage of its more balanced mix of holdings, Portfolio 2 moved into the lead with a gain of 23.0% after the first ten months. Portfolio 3 continues to trail the other two but has still delivered a respectable return and remains competitive with the major indexes.

Portfolio 1 and Portfolio 2 continue to outperform all four indexes, while Portfolio 3 is only 0.4 percentage points behind the TSX and 0.2 points behind the Nasdaq. After delivering the strongest performance of October, Portfolio 2 has taken the lead as we head into the final stretch of 2026. A monster finish to the year, fuelled by another AI rally, would certainly be welcome, but as long as the markets, and more importantly the three portfolios, keep moving higher, I’ll be happy. 😊

What My Three Portfolios Did in October 2026

Portfolio 1 for October 2026: DOWN

Activity

Sold: Carnival Corporation (NYSE: CCL) Please see October 9 Weekly Update [see Oct 9 Weekly Update]

Trimmed: Celsius Holdings (NASDAQ: CELH) Please see October 9 Weekly Update [see Oct 9 Weekly Update]

Sold: Home Depot (NYSE: HD) Please see October 9 Weekly Update [see Oct 16 Weekly Update]

Dividends Received this month:

Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.

Canadian $

Telus (TSE: T) DRIP

Dream Industrial REIT (TSE: DIR.UN) DRIP

BSR Real Estate Investment Trust (TSE: BSRT.UN)

Constellation Software (TSE: CSU)

BCE (TSE: BCE) DRIP

US $

Nvidia (NASDAQ: NVDA)