The loonie strengthens as markets react to a tariff delay, with investors focused on earnings and rate outlooks
The S&P/TSX Composite Index closed higher Tuesday as markets reacted to US President Donald Trump’s decision to postpone tariffs on Canadian goods, according to BNN Bloomberg.
The index gained 37.59 points, closing at 25,279.35. The Canadian dollar also strengthened, trading at 69.71 cents US compared to 68.48 cents US on Monday.
Market sentiment improved following the announcement, according to Ian Chong, portfolio manager at First Avenue Investment Counsel Inc.
He said markets were volatile Monday as investors anticipated the tariffs, but the 30-day delay offered a window for negotiations that could prevent the trade measures from taking effect.
US markets also posted gains. The Dow Jones Industrial Average rose 134.13 points to 44,556.04. The S&P 500 Index climbed 43.31 points to 6,037.88, while the Nasdaq Composite increased by 262.06 points, reaching 19,654.02.
Chong believes Trump’s tariff threats are “more bark than bite.” He said, “I think it’s very important to keep in mind that Trump is pro-growth, and a global trade war is not in his best interest.”
He added that a prolonged trade dispute would hurt the US economy and stock market, which Trump closely monitors.
Despite the delay, uncertainty over potential tariffs continues to weigh on business investment. “It has a ripple effect,” said Chong, noting that companies may hesitate to make major financial commitments until trade policies become clearer.
While trade tensions dominate investor concerns, earnings season in the US remains a key focus.
Palantir Technologies saw its stock surge 24 percent after surpassing profit expectations and providing an optimistic outlook, benefiting from increased investor interest in artificial intelligence. The gain helped boost the Nasdaq, which rose 1.4 percent.
Investors are also awaiting major earnings reports later in the week. Alphabet’s results were set to be released after the bell Tuesday, while Amazon’s earnings report is expected on Thursday.
Meanwhile, the US monthly jobs report, scheduled for Friday, will provide insights into the labour market as the Federal Reserve evaluates its next interest rate decision.
In January, the Fed chose to keep its key interest rate steady, whereas the Bank of Canada opted for a rate cut.
Chong noted that both central banks remain on an easing path, though trade uncertainties could impact their economic outlooks.
Commodity markets showed mixed results. The March crude oil contract fell 46 cents to US$72.70 per barrel, while the March natural gas contract dropped 10 cents to US$3.25 per mmBTU.
In contrast, precious and industrial metals saw gains. The April gold contract climbed US$18.70 to US$2,875.80 an ounce, and the March copper contract rose four cents to US$4.35 per pound.
