TORONTO – Canada’s main stock index finished in positive territory Friday after markets saw volatile swings for much of the week, with investors assessing the effect of recent U.S. midterm elections.
On Wednesday, Canadian and U.S. equity markets shot higher after the U.S. midterms saw Democrats take control of Congress.
Sadiq Adatia, chief investment officer of BMO Global Asset Management, said markets were initially encouraged by the fact that the elections were over and they could “move past it.”
“But then I think what you saw was, ‘OK, what does this now mean for the economy, markets, technology, and oil?’” he said.
An AI sell-off swept through the market Thursday, led by stocks tied to the build out of AI data centres. But markets fared better on Friday.
“We obviously saw a big pullback two days after the midterms, and you got a little bit of a bounce back today, but I wouldn’t say today is a convincing bounce back by any means,” Adatia said.
On Friday, the S&P/TSX composite index was up 183.82 points at 35,789.09.
In New York, the Dow Jones industrial average was down 237.33 points at 51,285.73. The S&P 500 index was up 23.13 points at 7,376.86, while the Nasdaq composite was up 264.43 points at 24,579.42.
The victories for Democrats raised the possibility that governments in the U.S. could force pauses in construction of more data centres. Voters across political parties say they’re wary about AI and don’t like the increases to power bills caused by data centres.
Any slowdown in construction of AI data centres would mean fewer purchases of AI chips, not to mention electricity and other products and services that are getting vacuumed up in the AI frenzy, which is driving much of the U.S. economy’s growth. Before that, even, critics were saying AI stock prices had shot too high.
Meanwhile, Canadian investors sifted through the 2026 budget, tabled Thursday, which has zeroed in on business growth with a suite of tax measures and incentives designed to spur private-sector investment. The central business pitch of the budget is to invest more, expand and become more competitive internationally.
“I think the budget is a good budget. Definitely the fact that we got extra revenue upside by higher oil prices and the fact that we use that to continue to spend on the economy, I think that’s a positive,” Adatia said.
“We need to do that given the uncertainties that are out there and the employment picture not looking that strong.”
Investors have also been digesting corporate earnings reports this week.
“Generally, the earnings story still has been good, not only in Canada but also in the U.S. as well, and even I think internationally. That’s still driven by the fact that we do still have a global economy that is good,” Adatia said.
The Canadian dollar traded for 70.86 cents US compared with 71.48 cents US on Thursday.
The December crude oil contract was up 31 cents US at US$90.83 per barrel.
The December gold contract was down US$38.60 at US$4,074.90 an ounce.
This report by The Canadian Press was first published Nov. 6, 2026.
— With files from The Associated Press
Companies in this story: (TSX: GSPTSE, TSX: CADUSD)
