TORONTO — Canada's main stock index posted a small gain Tuesday, while the loonie regained some of its strength against the U.S. dollar, following a decision by U.S. President Donald Trump to delay tariffs on Canadian goods headed to the U.S. that were set to begin today.
The S&P/TSX composite index closed up 37.59 points at 25,279.35. Meanwhile, the loonie traded for 69.71 cents US compared with 68.48 cents US on Monday.
“The market sentiment improved today,” said Ian Chong, portfolio manager for First Avenue Investment Counsel Inc.
After a volatile Monday as markets reacted to an impending trade war between Canada and the U.S. before the two sides agreed to a 30-day delay, markets were buoyed by the new window for negotiations that could prevent tariffs from coming into place after all, said Chong.
In New York, the Dow Jones industrial average was up 134.13 points at 44,556.04. The S&P 500 index was up 43.31 points at 6,037.88, while the Nasdaq composite was up 262.06 points at 19,654.02.
Chong thinks U.S. President Donald Trump’s escalation of tariffs is “more bark than bite.”
“I think it's very important to keep in mind that Trump is pro-growth, and a global trade war is not in his best interest,” he said.
“This would negatively impact the U.S. economy and the stock market, which Trump clearly cares about.”
But tariffs or no tariffs, the uncertainty is likely putting a chill on investment for businesses, said Chong: “It has a ripple effect.”
Though tariffs have taken up most of the airtime in recent days, U.S. earnings season continues to roll on.
Palantir Technologies saw its stock rise 24 per cent after beating profit expectations and issuing optimistic forecasts amid the ongoing investor focus on artificial intelligence.
The gain helped boost the Nasdaq, which rose 1.4 per cent.
Meanwhile, investors have been anticipating Alphabet earnings set for after the bell Tuesday, and Amazon on Thursday, said Chong.
Friday will bring the monthly jobs report in the U.S., one of the more important economic reports as the U.S. Federal Reserve looks toward its next interest rate decision. The central bank held its key rate steady in January while the Bank of Canada cut, as rate hikes have had a harder impact north of the border.
Both banks are still on the easing path, said Chong, but potential tariffs cast a dark shadow of uncertainty over their forecasts.
The March crude oil contract was down 46 cents at US$72.70 per barrel and the March natural gas contract was down 10 cents at US$3.25 per mmBTU.
The April gold contract was up US$18.70 at US$2,875.80 an ounce and the March copper contract was up four cents at US$4.35 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Feb. 4, 2025.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
