TORONTO – Canada’s main stock index dropped more than 1,000 points on Friday, weighed down by losses in the basic materials sector, while U.S. markets were also trading lower.
The mining-heavy TSX dropped along with gold and silver in reaction to U.S. President Donald Trump announcing Kevin Warsh will be his choice to replace Jerome Powell as U.S. Federal Reserve chair.
“You’re seeing metals retreat for the first time, and I’d say a bit of a meaningful retreat,” said Allan Small, senior investment adviser at iA Private Wealth.
The S&P/TSX composite index was down 1,092.61 points at 31,923.52. The April gold contract was down US$609.70 at US$4,745.10 an ounce on Friday.
In New York, the Dow Jones industrial average was down 179.09 points at 48,892.47. The S&P 500 index was down 29.98 points at 6,939.03, while the Nasdaq composite was down 223.30 points at 23,461.82.
“Kevin Warsh, who is more hawkish perhaps than maybe some of the other candidates seem to be, that gave a bit of a boost to the U.S. dollar and a bit of a selloff for gold and some of the metals that … act as a hedge against the U.S. dollar,” said Small.
“That would probably be the main driver of the decline on the TSX today.”
Whoever leads the Fed has a big influence on the global economy and stock markets by helping to dictate where the U.S. central bank moves interest rates. Such decisions lift or weigh on prices for all kinds of investments.
One fear in financial markets, which has pushed up gold’s price and weakened the U.S. dollar’s value, is that the Fed will lose some of its independence because of Trump’s interference.
“Kevin Warsh is a good choice in that if they were to choose some of the other candidates, it might be conceived that the president is trying to control the Federal Reserve, that the Federal Reserve would not be considered independent,” Small said.
The longtime assumption has been that the Fed can operate separately from the rest of Washington so it can make decisions that are painful in the short term, such as keeping interest rates high and grinding down on the economy, to fix a long-term problem, such as getting inflation back down to its goal of two per cent.
The Canadian dollar traded for 73.74 cents US compared with 73.99 cents US on Thursday.
The March crude oil contract was down 21 cents US at US$65.21 per barrel.
This report by The Canadian Press was first published Jan. 30, 2026.
— With files from The Associated Press.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
