Financial figures scroll across a digital display at TMX Group in Toronto’s financial hub (Photo: THE CANADIAN PRESS/Darren Calabrese)
Canada’s main stock market closed higher on Monday, helped by strong gains across all sectors. The S&P/TSX composite index jumped by 164.79 points to end the day at 26,857.11, driven largely by the government’s last-minute decision to scrap the digital service tax.
Ashish Utarid, assistant vice-president at IG Wealth Management, said the move helped Canadian stocks rebound after a tough Friday. He believes the removal of the tax gave a strong push to investor confidence, especially after U.S. President Donald Trump’s warning. Trump had criticized the tax as an “attack” on the U.S. and paused trade talks with Canada. But with Ottawa backing down just hours before the tax payment was due, tensions eased.
Prime Minister Mark Carney called the cancellation a strategic part of broader trade talks. It appears to have paid off, at least for the markets.
Meanwhile, in the U.S., stock markets celebrated another winning day. The Dow Jones surged by 275.50 points, ending at 44,094.77. The S&P 500 rose by 31.88 points to 6,204.95, and the Nasdaq climbed 96.28 points to close at 20,369.73. These gains marked the end of a second consecutive positive month for Wall Street.
According to Utarid, investor excitement around the rollback of the digital tax played a major role in lifting Canadian equities. It also added fuel to already rising U.S. stocks, which have been gaining steadily on hopes that Trump will make deals to soften his proposed tariffs.
Utarid noted that investors seem eager to buy during dips. With the Canadian tax scrapped, they saw it as the right time to jump back in. “There's growing confidence every time trade negotiations move forward,” he said.
He also commented on the back-and-forth tactics used by the Trump administration, saying such moves are part of negotiation strategies. Still, he acknowledged the importance of the U.S. as a trading partner for Canada, stressing that working out a deal is ultimately in Canada’s best interest.
With more certainty in the market, Utarid said he has moved back into equities after starting the year cautiously. He sees opportunities both in the U.S. and Canada, especially in commodities.
He pointed to rising gold prices as a bright spot for Canadian stocks. Gold climbed by $20.10 to reach $3,307.70 per ounce. The gain was partly due to investors using gold to guard against inflation, as the U.S. government plans major spending that could boost consumer buying.
Oil prices, on the other hand, slipped slightly. The August crude contract dropped 41 cents to settle at $65.11 per barrel.
The Canadian dollar also gained, trading at 73.30 cents U.S., up from 73.12 cents on Friday.
