Kris Backus, the broadcast manager at TMX Group Ltd., oversees operations at the company's broadcast center in Toronto's financial district. This photo was taken on Friday, May 9, 2014. (THE CANADIAN PRESS/Darren Calabrese)
Canada’s stock market saw a strong comeback on Monday, with the S&P/TSX composite index climbing more than 200 points. The surge was driven by gains in the energy, financial, and base metals sectors. Meanwhile, U.S. stock markets also bounced back after recent losses.
Market Recovery After Recent Slump
Monday’s market rally helped recover some of the losses from the past couple of weeks. Mona Mahajan, a senior investment strategist at Edward Jones, noted that a rebound is common after a market correction. Recently, the S&P 500 dropped by 10% due to uncertainty surrounding U.S. trade policies.
U.S. President Donald Trump’s back-and-forth on tariffs has fueled volatility. Over the past two weeks, he has imposed new tariffs, postponed some, introduced additional ones, and hinted at more to come. The shifting policies have created uncertainty, causing fluctuations in the stock market.
Key Tariff Deadlines Ahead
Investors are now closely watching April 2, when Trump’s promised “reciprocal” tariffs are set to take effect. Additional tariffs on certain sectors may also be announced on the same date. Furthermore, temporary exemptions on select goods from Canada and the U.S. are due to expire next month, adding more uncertainty to trade relations.
The Toronto Stock Exchange’s S&P/TSX composite index finished the day up by 231.71 points, closing at 24,785.11. On Tuesday, Canada will release inflation data for February. Mahajan mentioned that inflation has been stable for now, but future trends will depend on how trade policies evolve.
U.S. Markets Also Surge
In the U.S., markets also saw a sharp rise. The Dow Jones Industrial Average jumped 353.44 points, closing at 41,841.63. The S&P 500 index gained 36.18 points to reach 5,675.12, while the Nasdaq composite rose by 54.58 points to 17,808.66.
The latest U.S. retail sales data was released on Monday. Although the numbers were slightly weaker than expected, analysts pointed out that consumer spending remains steady. Mahajan emphasized that the report eased some concerns that consumer confidence was faltering.
Federal Reserve’s Interest Rate Decision Looms
All eyes are now on the U.S. Federal Reserve, which will announce its latest interest rate decision on Wednesday. The central bank is expected to keep rates unchanged, but investors are eager to hear Fed Chairman Jerome Powell’s remarks on tariffs and the economic outlook.
Previously, the Fed projected two interest rate cuts for 2025, but there is speculation that a third cut may be added to the forecast. Mahajan suggested that the Fed might also revise its economic growth outlook. If a downgrade happens, it could indicate that the Fed sees signs of economic weakness ahead, raising expectations for future rate cuts.
Currency & Commodity Market Updates
The Canadian dollar strengthened slightly, trading at 69.91 cents US, up from 69.50 cents US on Friday.
In the commodities market, crude oil prices rose by 46 cents to reach US$67.37 per barrel, while natural gas fell by eight cents to US$4.02 per mmBTU. Gold prices increased by US$5.00 to hit US$3,006.10 per ounce, and copper prices gained six cents, reaching US$4.96 per pound.
