Canada’s main stock index struggled on Monday as investors dumped risky assets, demonstrating their nerves over U.S. President Donald Trump’s tariffs on Canada.
The TSX dropped 291.34 points, or 1.1%, to conclude Monday at 25,241.76
The Canadian dollar recovered 0.67 cents at 68.63 cents U.S.
Trump slapped a 25% import tariff on all Canadian goods except energy products, which will carry a levy of 10%.
Major brokerages including J.P. Morgan warned that Canada and Mexico could face recessions if the tariffs persist.
Prime Minister Justin Trudeau immediately announced retaliatory tariffs on $155 billion of U.S. goods.
Those on $30 billion worth of goods will take effect on Tuesday, the same day as most of Trump’s tariffs, and duties on the remaining will take effect in 21 days, Trudeau said.
In corporate news, Brookfield Asset Management announced that it has completed the acquisition of electric heat trace systems maker Chemelex from nVent Electric Plc for $1.7 billion. Brookfield erased $2.06, or 2.4%, to $84.92.
Bombardier tumbled $2.20, or 2.6%, to $82.85. Shares of Canadian auto parts makers also sank; Magna International fell $3.61, or 6.3%, to $54.02, and Linamar losing $2.75, or 4.9%, to $53.79.
Shares of alternative financial services company goeasy tumbled $14.53, or 8.2%, to $162.40.
Powersports vehicles maker BRP slid $5.46, or 7.9%, to $64.04, its lowest since 2020.
In industrial issues, Air Canada dropped $1.35, or 6.9%, to $18.26, while Cargojet landed $7.01, or 5.9%, to $112.17.
Gold stocks tried to balance things out, with Equinox capturing 82 cents, or 9.4%, to $9.59, while Iamgold shares hiked 31 cents, or 3.4%, to $9.35.
On the economic beat, the S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) fell to 51.6 in January from 52.2 in December. Still, it was the fifth straight month above the 50.0 no-change mark. A reading above 50 indicates expansion in the sector.
ON BAYSTREET
The TSX Venture Exchange flopped 3.08 points to 620.67.
All but three of the 12 subgroups stayed in the red on the day, weighed most by industrials, off 2.4%, health-care, down 2%, %, and consumer discretionary stocks, retreating 1.8%.
The three gainers were gold, up 2%, materials, better 0.8%, and communications, gaining 0.5%.
ON WALLSTREET
The Dow Jones Industrial Average on Monday staged a major comeback, recovering steep losses from earlier in the session after President Donald Trump said tariffs against Mexico would be paused for one month.
Shares in the 30-stock index backpedaled 122.75 points to 44,412.91.
The S&P 500 slumped 45.96 points to 5,994.52
The NASDAQ fell 235.49 points, or 1.2%, to 19.391.96
Stocks initially dropped Monday after President Donald Trump hit several key U.S. trading partners with tariffs over the weekend, raising fears that a full-blown trade war would disrupt global supply chains, reignite inflation and slow the economy. But gains were rapidly dissolving amid comments from Mexico President Claudia Sheinbaum.
But a post from Mexico’s President Claudia Sheinbuam following a conversation with Trump sparked an intraday comeback. “We had a good conversation with President Trump with great respect for our relationship and sovereignty; we reached a series of agreements,” Sheinbaum wrote in a post, according to a translation from Spanish.
Trump on Saturday slapped a 25% tariff on goods from Mexico and Canada; energy imports from Canada will have a 10% tariff. Trump also placed a 10% levy on imports from China. Trump also signaled over the weekend that tariffs on the European Union would be imposed next.
U.S. automakers with big North American supply chains led the decline, with General Motors shares off by 5% and Ford down by 4%. Auto suppliers including Aptiv caved 8% and Avery Dennison lost 2%. Engine maker Cummins faltered 2%.
Constellation Brands, a large importer of alcohol from Mexico, tumbled 4%. Shares of Chipotle, which imports avocados from Mexico, lost 2%. Nike was down 4%, while fellow clothing maker Lululemon shed 3%.
Prices for the 10-year Treasury sagged late afternoon, raising yields to 4.54% from Friday’s 4.52%. Treasury prices and yields move in opposite directions.
Oil prices regained 38 cents to $72.91 U.S. a barrel.
Prices for gold recaptured $21.70 an ounce to $2,856.70 U.S.
