TORONTO: Canada’s main stock index fell on Friday, led by declines for the communication services sector, as the risk of a wider trade war spooked investors and after stronger-than-expected jobs data tempered expectations for Bank of Canada interest rate cuts.
The S&P/TSX composite index ended down 91.58 points, or 0.36%, at 25,442.91. For the week, the index was down 0.35%, after three straight weekly gains.
Wall Street also lost ground after US President Donald Trump said he might impose reciprocal tariffs on several countries next week. On Monday, Trump suspended his threat of steep tariffs on Mexico and Canada, agreeing to a 30-day pause.
“President Trump looking to have retaliatory tariffs against unnamed countries continues to prove that this is top of mind for him,” said Ben Jang, a portfolio manager at Nicola Wealth.
“The strengthening overall of the Canadian labour market just gives the Bank of Canada some flexibility (to deal) with the unknowns of tariffs.”
Canada’s economy added 76,000 jobs in January, eclipsing expectations for a gain of 25,000, and the unemployment rate unexpectedly dipped to 6.6%.
Investors see a 62% chance that the Bank of Canada will cut its benchmark interest rate by a further 25 basis points in March, down from 64% before the data.
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