The TMX Market Centre is pictured in downtown Toronto. (Photo: Paige Taylor White / The Canadian Press)
Canada’s main stock index stumbled at the start of the week, weighed down by slumps in metals, industrials, and utilities—even as energy stocks tried to lift the mood. Meanwhile, U.S. markets showed a patchy performance, with some indices inching up and others dipping.
The S&P/TSX composite index ended the day down 88.93 points to settle at 27,405.42.
South of the border, the Dow Jones Industrial Average slipped 64.36 points to 44,837.56. The S&P 500 saw a modest gain of 1.13 points, closing at 6,389.77, and the Nasdaq composite climbed 70.27 points to 21,178.58.
A Bit of Relief: U.S.–EU Trade Deal Soothes Markets
Investors got a breather after news broke of a fresh trade deal between the U.S. and the European Union. Announced on Sunday, the agreement enforces a 15% tariff on most EU goods entering the U.S. However, vital sectors like steel and pharmaceuticals were left out, leaving some uncertainty in place.
While the deal brings only partial clarity, it’s still considered a positive sign. According to Kathrin Forrest, an equity investment director at Capital Group, this move helps avoid a 30% tariff threat previously issued by President Donald Trump, which would’ve hit by August 1 without a resolution.
She also noted that the deal highlights how the U.S. continues to use tariffs strategically—not just to curb imports, but also to generate revenue.
“The expectations around these talks were already very low,” Forrest said. “But this agreement has helped steer the outcome away from worst-case scenarios.”
Canada Awaits Its Turn on the Trade Table
Canada isn’t off the hook just yet. A separate trade negotiation between Canada and the U.S. has its own deadline set for August 1. President Trump has warned of a 35% tariff on Canadian imports if no agreement is reached.
While tensions simmer, investors are also closely watching economic signals that may impact upcoming decisions.
Key Interest Rate Decisions Coming This Week
The Bank of Canada is scheduled to announce its interest rate decision and monetary policy report on Wednesday. After maintaining the key rate at 2.75% for both April and June, analysts expect the central bank to hold steady again this month.
The U.S. Federal Reserve is also expected to release its own rate decision the same day.
According to Forrest, both central banks might stay the course. “If neither makes a move, don’t expect any dramatic market swings,” she said. What will be crucial, however, is how each leader outlines their vision for future rate changes.
Market Snapshot
- The Canadian dollar dipped slightly, trading at 72.87 cents US, down from 72.97 cents on Friday.
- The September crude oil contract rose by $1.55, closing at $66.71 per barrel.
- The August gold contract dropped $25.60, ending at $3,310.00 per ounce.
