Someone walks by the TMX Market Centre building in Toronto. (Photo: The Canadian Press/Paige Taylor White)
Canadian and U.S. stock markets stumbled Friday as new American tariffs kicked in and disappointing job numbers fueled concern over the economy’s health.
Canada’s main stock index, the S&P/TSX composite, dropped 239.35 points to 27,020.43, following global sell-offs triggered by U.S. President Donald Trump’s decision to raise tariffs on multiple countries. The move rattled investors and added fresh uncertainty to already shaky markets.
Brianne Gardner, a senior wealth manager at Velocity Investment Partners with Raymond James, said market volatility is likely to worsen in the short term. “Trade uncertainty often leads to panic,” she explained, adding that markets have been fragile since the last major sell-off in April. She warned that seasonal weakness in August and September might trigger a 5–7% market dip, and Friday’s drop could be just the beginning.
U.S. Markets Post Worst Day Since May
It wasn’t just Canada feeling the pinch. In New York:
- The Dow Jones fell 542.40 points to 43,588.58
- The S&P 500 slipped 101.38 points to 6,238.01
- The Nasdaq plunged 472.32 points to 20,650.13
The slide marked the U.S. market’s worst day since May, as Wall Street reacted to both Trump’s aggressive trade move and troubling labour market data.
Trump Raises Tariffs on Canada, Others
President Trump followed through on his earlier threat to increase tariffs on Canada, hiking them up to 35%. Canadian Prime Minister Mark Carney expressed disappointment at the decision, particularly because the move could strain trade relations.
However, the White House clarified that goods already compliant with CUSMA (Canada-U.S.-Mexico Agreement) will not be affected. Still, investors worry that unexpected moves like this could ripple through sectors and create prolonged instability.
U.S. Job Growth Misses the Mark
The labour market in the U.S. showed serious signs of slowing. Only 73,000 jobs were added in July, far below economists’ expectations. Even more concerning, the U.S. Labour Department revised previous reports, cutting 258,000 jobs from May and June totals.
Gardner noted that economic indicators are now “more important than ever,” as these cracks may influence whether interest rates get adjusted in the coming months. She said that if this trend continues, rate cuts could be on the table by September.
Central Banks Hold Steady — For Now
Both the Bank of Canada and the U.S. Federal Reserve decided earlier this week to hold interest rates steady, in line with expectations. But that could change.
According to Gardner, there's now a 46% chance that the Fed could cut rates in September, while the odds of a Bank of Canada rate cut remain lower at 19% — for now. Continued weak data could shift those numbers quickly.
Currency, Oil, and Gold Prices React
- The Canadian dollar inched up slightly, trading at 72.48 cents US, up from 72.23 the previous day.
- Crude oil prices fell, with September contracts down $1.93 to $67.33 USD a barrel.
Meanwhile, gold prices surged, with December contracts rising $51.20 to reach $3,399.80 USD an ounce, as investors turned to safe-haven assets.
