The TMX Market Centre at the Toronto Stock Exchange (TSX) in Toronto, Ontario, Canada, as seen on Wednesday, November 8, 2023. (Photo by Chloe Ellingson/Bloomberg)
Stock markets in Canada and the U.S. closed higher on Wednesday as investors braced for an announcement from former U.S. President Donald Trump regarding new tariffs. The anticipation drove a volatile trading session, with major indexes swinging before settling in positive territory.
Markets Show Strength Amid Uncertainty
The S&P/TSX composite index climbed 273.90 points, pushing it past 25,300. In the U.S., markets fluctuated throughout the day. The S&P 500 swung between gains and losses of 1.1% before closing up 37.90 points at 5,670.97. The Dow Jones added 235.36 points, finishing at 42,225.32, while the Nasdaq advanced 151.16 points to settle at 17,601.05.
According to Pierre-Benoît Gauthier, vice president at IG Wealth Management, the stock market witnessed a battle between pessimistic and optimistic investors, with the latter maintaining the upper hand. "It’s been a tug of war, and the bulls have been winning so far," he noted.
Tesla’s Roller-Coaster Ride
Tesla’s stock took a hit earlier in the day, dropping over 5% following reports of weaker vehicle deliveries in the first quarter compared to the previous year. However, the stock rebounded sharply, closing 5.3% higher after speculation surfaced that CEO Elon Musk might step away from his government advisory role to focus on his company.
Trump’s Tariff Move and Market Reactions
Just after the market closed, Trump announced new tariffs on multiple countries but spared Canada and Mexico, in addition to existing steel, aluminum, and auto tariffs. Analysts expect market reactions to play out on Thursday, with Gauthier advising caution. "It’s important not to overreact. The long-term effects will take time to surface," he said.
Focus Shifts to U.S. Jobs Report
On Friday, investors will turn their attention to employment data, which could influence the Federal Reserve’s next move on interest rates. A weak jobs report could prompt a rate cut, potentially shaping market trends in the coming weeks.
Commodity and Currency Movements
The Canadian dollar inched up slightly, trading at 69.83 cents US compared to 69.70 cents US on Tuesday. Crude oil prices climbed 51 cents to reach US$71.71 per barrel, while natural gas rose 11 cents to US$4.06 per mmBTU. Gold prices surged by US$20.20 to US$3,166.20 per ounce, and copper edged up to US$5.04 per pound.
