TORONTO – Canada’s main stock index closed slightly lower on Monday after Prime Minister Justin Trudeau officially announced he plans to step aside, while U.S. stock markets were mixed.
“It was widely expected. So it’s not a shock by any stretch,” said Michael Currie, senior investment adviser at TD Wealth, of Trudeau’s resignation.
“Some of the things that directly (affect) the market are some of the policies that they put in the fall economic statement they’re proposing, plus the capital gains proposal; they’re effectively either in limbo or dead right now.”
Given the criticism of the capital gains tax change, which has yet to pass but would have raised taxes on companies and some individuals, “that’s certainly been looked on favourably,” said Currie.
“So it might not be a surprise the tech sector and energy are pretty much the strongest areas today.”
The market famously hates uncertainty, noted Currie, so after months of speculation there’s also likely some relief at the announcement.
The S&P/TSX composite index closed down 73.75 points at 24,999.79, dipping lower in the afternoon.
In New York, the Dow Jones industrial average was down 25.57 points at 42,706.56. The S&P 500 index was up 32.91 points at 5,975.38, while the Nasdaq composite was up 243.30 points at 19,864.98.
South of the border, large tech stocks led gains, echoing the leadership position they held for much of 2024.
Late on Friday, Microsoft said it’s on track to invest about $80 billion to build out artificial intelligence-enabled data centres to train AI models. That helped boost the chip sector, said Currie — chipmaking giant Nvidia gained 3.4 per cent.
The next U.S. jobs report is this Friday, a major piece of economic data as the U.S. Federal Reserve looks ahead to an interest rate decision at the end of the month. The central bank cut rates in December and announced it expects to cut just twice in 2025 instead of the previously forecast four.
That forecast was a “damper on markets,” said Currie, putting a “minor dent” in what was an otherwise great year for equities.
The U.S. labour market remained strong in the face of higher interest rates.
“The Fed, especially in the latter part of last year, was talking less about inflation and more about jobs,” said Currie.
The Canadian dollar traded for 69.70 cents US compared with 69.24 cents US on Friday.
The February crude oil contract was down 40 cents at US$73.56 per barrel and the February natural gas contract was up 32 cents at US$3.67 per mmBTU.
The February gold contract was down US$7.30 at US$2,647.40 an ounce and the March copper contract was up nine cents at US$4.16 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Jan. 6, 2025.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
