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Tariffs

Canadian Stock Market Falls Amidst Tariff Uncertainty

Strategic Insights

— 1 min read

Canada's main stock index, the S&P/TSX Composite Index, declined by 72.89 points or 0.3 per cent to 26,210.56, as investors reacted to U.S. court decisions impacting President Donald Trump's tariffs. The uncertainty surrounding tariff policy led to ongoing market volatility, with the financials sector and consumer staples falling 0.6 per cent and 0.8 per cent respectively. Meanwhile, the real estate and utilities sectors posted gains of 0.9 per cent and 0.1 per cent respectively, as long-term borrowing costs fell.

Key Takeaways:

  • The U.S. Court of International Trade ruled that President Trump does not have the authority to impose tariffs on nearly every country using the International Economic Emergency Powers Act, blocking both the "Liberation Day" duties and tariffs on Canada and Mexico.
  • A ruling from the United States Court of Appeals for the Federal Circuit temporarily reinstated the tariffs while it considers an appeal from the White House.
  • The market reaction to the earlier decision was relatively muted, likely because most stock valuations have already baked in positive tariff news, said Candice Bangsund, vice-president and portfolio manager at Fiera Capital.
  • Royal Bank of Canada missed analysts' quarterly profit estimates, while Canadian Imperial Bank of Commerce topped estimates as its earnings from the capital markets unit rose 20 per cent.
  • BRP Inc., a powersports product manufacturer, reported first-quarter results that beat estimates, with shares climbing 12.7 per cent.
  • The S&P/TSX Composite Index was down 72.89 points, or 0.3 per cent, at 26,210.56, while the S&P 500 Index was up 23.62 points at 5,912.17.

Statistics:

  • S&P/TSX Composite Index: down 72.89 points, or 0.3 per cent, at 26,210.56.
  • West Texas Intermediate crude: down 90 US cents at US$60.94 a barrel.
  • Royal Bank of Canada: shares fell 3.5 per cent.
  • Canadian Imperial Bank of Commerce: shares posted a smaller decline, ending 0.3 per cent lower.
  • BRP Inc.: shares climbed 12.7 per cent.
  • Nvidia Corp.: shares closed up more than 3 per cent.
  • United States Court of Appeals for the Federal Circuit: temporarily reinstated tariffs while it considers an appeal from the White House.

Sources:

  • THE CANADIAN PRESS
  • REUTERS
  • Candice Bangsund, vice-president and portfolio manager at Fiera Capital in Montreal.

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