TORONTO – Stock markets in Canada and the U.S. rallied to start the week after reports that a new round of U.S. tariffs scheduled to take effect on April 2 might be narrower than first expected.
“Trade headlines are front and centre in today’s market,” said Candice Bangsund, vice-president and portfolio manager with Fiera Capital.
“Investors got some relief on the trade front, and financial markets are firmly in risk-on mode to start the week.”
Over the weekend, media reports surfaced that a new round of tariffs coming April 2 could be softened or postponed.
“Obviously that’s helped to alleviate fears around the potential for a full-blown trade war and its impacts on the global economy. So risk appetite has been reinvigorated after what’s been actually a pretty volatile month in the stock market,” said Bangsund.
The S&P/TSX composite index closed up 335.62 at 25,304.11.
In New York, the Dow Jones industrial average was up 597.97 points at 42,583.32. The S&P 500 index was up 100.01 points at 5,767.57, while the Nasdaq composite was up 404.54 points at 18,188.59.
This kind of volatility — significant swings up or down in reaction to headlines — is expected to continue, Bangsund said.
Trump also announced Monday new tariffs on Venezuela and on countries that buy its energy.
That news showed up in rising oil prices, said Bangsund, as it could cause some supply disruption.
Monday’s rally was led by the U.S. mega-cap stocks, which have been particularly beaten down recently, said Bangsund: “There’s a bit of a rotation back to those lagging corners of the market.”
Amid the heightened sensitivity to tariff news, this week investors will be waiting for Friday’s inflation report in the U.S., said Bangsund.
Progress on inflation has stalled in the U.S., and the trade war threatens to send it higher, she said.
The U.S. Federal Reserve is still plotting two interest rate cuts this year, and markets are expecting as much, but with the upside risks posed to inflation by tariffs, Bangsund said 2025 could actually bring zero cuts.
“In our view, we think the Federal Reserve will be sidelined for a while now, given these inflationary dynamics,” she said.
“That report on Friday will be critical to monitor.”
The Canadian dollar traded for 69.84 cents US compared with 69.70 cents US on Friday.
The May crude oil contract was up 83 cents US at US$69.11 per barrel and the May natural gas contract was down seven cents at US$3.95 per mmBTU.
The April gold contract was down US$5.80 at US$3,015.60 an ounce and the May copper contract was down two cents at US$5.09 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published March 24, 2025.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
