The Toronto Stock Exchange (TSX) ticker display in Toronto on May 10, 2013. (Photo: Frank Gunn/The Canadian Press)
Canada’s main stock index inched higher on Monday, with gains in telecom helping balance losses in the energy and industrial sectors. Meanwhile, U.S. stock markets saw mixed results, with the Nasdaq dropping 1.2%.
Markets remained cautious after last week’s sell-off. The Nasdaq and S&P 500 felt the pressure from a 3.1% dip in Nvidia’s stock ahead of its earnings report later this week.
"The market needed a pause," said Stephen Duench, vice president and portfolio manager at AGF Investments Inc. "It’s crucial to see if the recent sell-off of high-performing stocks continues."
In New York, the Dow Jones Industrial Average gained 33.19 points, closing at 43,461.21. However, the S&P 500 slid 29.88 points to 5,983.25, and the Nasdaq took a sharp hit, losing 237.08 points to settle at 19,286.93.
Canada’s S&P/TSX Composite Index closed slightly higher at 25,151.26, gaining 4.23 points.
Key Earnings Reports to Watch
As earnings season winds down, investors are gearing up for major reports from key players on both sides of the border. Canadian banks kick off their earnings season on Tuesday, with analysts watching closely to see if they can sustain their recent upward trend.
However, the spotlight is on Nvidia, set to release its earnings after markets close on Wednesday. The chipmaker has been at the forefront of the artificial intelligence boom, driving tech stocks higher in recent years. But concerns are mounting over whether the massive AI-related spending is sustainable, especially after reports of a Chinese AI model developed at a fraction of the cost compared to its U.S. counterparts.
Economic Data & Trade Tensions
Canada’s GDP data is also due this week, with recent economic indicators performing better than expected. However, trade tensions loom large as potential U.S. tariffs could shake investor confidence.
"The bigger concern is the tariffs, more than the GDP data," Duench noted. The U.S. had temporarily paused duties on Canadian imports, but that suspension is set to expire on March 4, raising fears of new retaliatory measures from Canada.
Despite these concerns, markets have so far brushed off former U.S. President Donald Trump’s tariff threats, according to Duench.
Market Overview
- Canadian Dollar: 70.30 cents US (down from 70.39 cents US on Friday)
- Crude Oil (April Contract): Up 30 cents to US$70.70 per barrel
- Natural Gas (April Contract): Down 15 cents to US$3.98 per mmBTU
- Gold (April Contract): Up US$10.00 to US$2,963.20 an ounce
- Copper (May Contract): Down six cents to US$4.56 per pound
