The TMX Market Centre in Toronto is pictured on Wednesday, September 11, 2024. (Photo: The Canadian Press/Paige Taylor White)
Canada’s primary stock index jumped more than 200 points on Monday, fuelled by strong performances in energy, base metals, and technology stocks. U.S. markets followed suit, posting solid gains despite looming trade tensions.
The surge came even as U.S. President Donald Trump announced a 25% tariff on all steel and aluminum imports, set to take effect Monday. However, the official implementation was delayed until after market hours, with no explanation provided.
Ryan Crowther, a portfolio manager at ClearBridge Investments, noted that the market’s muted reaction to the tariff threat was expected. “For Canadian investors, this is a genuine concern, but by February 3, the fear had already been factored in,” he said. Investors are now adjusting their strategies in a fast-moving market.
By the closing bell, the S&P/TSX composite index climbed 215.95 points, finishing at 25,658.86. In the U.S., the Dow Jones Industrial Average gained 167.01 points, closing at 44,470.41. The S&P 500 rose 40.45 points to 6,066.44, while the Nasdaq composite surged 190.87 points to 19,714.27, largely driven by gains in major tech stocks.
Earnings & Economic Reports in Focus
This week, investors are keeping a close watch on corporate earnings and economic data. On Monday, McDonald’s reported lower-than-expected profits and revenue, yet its stock still climbed. Investors appeared optimistic about the company’s strong performance in international markets, which offset weak U.S. sales.
Another key event on the horizon is the U.S. inflation report, which could influence the Federal Reserve’s next interest rate decision. According to Crowther, the Fed’s response will be critical in shaping market sentiment in the coming weeks.
TD Bank's Strategic Move
In Canada, TD Bank’s stock jumped 3.9% after announcing plans to sell its stake in Charles Schwab. The bank intends to use the proceeds for stock buybacks and reinvestment, which reassured investors and boosted confidence in its growth strategy.
Commodities Rally on Market Uncertainty
Commodities provided additional momentum for the TSX. Crowther pointed out that gold prices surged, reflecting investor concerns over market volatility.
“Gold tends to shine during uncertain times,” he said. “Investors are looking for safe havens, and that’s pushing prices higher.”
By the end of the trading day:
- Gold rose $46.80 to $2,934.40 per ounce.
- Copper gained 12 cents, reaching $4.71 per pound.
- Crude oil climbed $1.32, settling at $72.32 per barrel.
- Natural gas increased 13 cents to $3.44 per mmBTU.
Meanwhile, the Canadian dollar edged lower, trading at 69.82 US cents, down slightly from 69.94 US on Friday.
