Canada’s main stock index struggled to find direction on Friday, pulled between worries over looming tariffs and positive domestic economic data.
The S&P/TSX composite index was up 0.06% at 25,144.50.
After surging more than 3% in January, the index is heading toward an over 1% loss in February.
“What really pressuring the markets is Trump talking about tariffs,” said Ian Chong, portfolio manager at First Avenue Investment Counsel.
U.S. President Donald Trump on Thursday said his proposed 25% tariffs on Mexican and Canadian goods will take effect on Tuesday, along with an extra 10% duty on Chinese imports because deadly drugs are still pouring into the U.S. from those countries.
“We will see if he (Trump) will reverse course but I think you have to take him for what he is saying now, simply because he already used it as a negotiating tactic last month,” Chong said.
U.S. consumer spending unexpectedly fell in January, data released on Friday showed, but a pick up in inflation could provide cover for the Federal Reserve to delay cutting interest rates for some time.
TSX set for losses as trade tensions overshadow banks results
Meanwhile, Canada’s gross domestic product in the fourth quarter expanded by 2.6% on an annualized basis, surpassing expectations as a jump in consumer spending, business investments and exports lifted growth.
On TSX, information technology stocks led the declines, down 1.8%, driven by a 21.6% drop for Docebo after the learning platform reported fourth-quarter results.
Materials group shed 1.2% as gold prices fell on Friday on stronger U.S. dollar.
Energy stocks were also trading in the red tracking falling oil prices as markets braced for Washington’s tariff threats and Iraq’s decision to resume oil exports from the Kurdistan region.
On the flip side, industrials gained 0.2%, driven by a 3% gain for waste management company GFL environmental after TD Cowen raised target price on the stock.
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