Canada’s main stock index fell sharply on Friday as investors reacted to mounting global trade tensions following China’s retaliatory measures against U.S. reciprocal tariffs.
Toronto Stock Exchange’s S&P/TSX composite index fell 5% to 23,118.61 points, its lowest since 11 September 2024 if losses hold.
China on Friday retaliated with additional tariffs of 34% on all U.S. goods from April 10, intensifying a trade war between the two leading global economies and amplifying fears of a recession.
“There is going to be this idea that whatever U.S. does, we are going to do back the same, and that is obviously not good for the markets,” said Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth.
On Thursday, Canadian Prime Minister Mark Carney announced a limited set of counter measures against U.S. tariffs.
Heavyweight energy sector led the declines on TSX, falling 9.7%, as oil prices plunged 8% and are headed towards their lowest close since the midst of the coronavirus pandemic in 2021.
TSX flat as markets await Trump tariff reveal
Materials sector fell 7.9%, tracking the decline in base metals, with copper on track for its biggest weekly slide since the early days of the 2020.
Gold prices fell more than 1%, as traders liquidated their bullion positions amid broader market selloffs.
Information technology stocks touched their lowest in seven months, down 3%. Celestica fell nearly 8%, the steepest drop in the sector.
On the data front, U.S. Labor Department reported a higher-than-expected job increase in March, but Trump’s tariffs may weaken the labor market as business confidence drops.
Canada’s unemployment rate ticked up in March.
Investors will also be watching Federal Reserve Chair Jerome Powell’s speech at 11:25 a.m. ET for clues on the path of interest rates cuts.
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