TORONTO – The S&P 500 index fell more than two per cent on Tuesday amid geopolitical tensions and U.S. tariff threats, while Canada’s main stock index was weighed down by broad-based losses.
U.S. President Donald Trump threatened to hit eight NATO members with new tariffs as tensions escalate over his attempts to assert American control over Greenland.
The S&P/TSX composite index was down 340.68 points at 32,750.28.
In New York, where markets were closed for the Martin Luther King Jr. Day holiday on Monday, the Dow Jones industrial average was down 870.74 points at 48,488.59. The S&P 500 index was down 143.15 points at 6,796.86, while the Nasdaq composite was down 561.06 points at 22,954.32.
Sadiq Adatia, the chief investment officer at BMO Global Asset Management, said it appears that the “sell U.S. trade” that occurred last year has re-emerged.
“If the noise continues for an extended period of time, I think were going to find some pretty good buying opportunities here, because the underlying fundamentals still look really good,” he said.
“What happens here with Greenland has minimal impact to a U.S. company.”
Trump said on Saturday that he would charge a 10 per cent import tax starting in February on goods from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland.
Tariffs have been looming over global economies since 2024. Trump’s tariff policy has been confusing and uncertain, involving the threat or implementation of tariffs and then often followed by delays or cancellations.
Losses on the S&P/TSX composite index were led by the technology sector on Tuesday.
“When you have sell-offs, it’s the highest valuation names that drop first … anything that is a higher multiple, whether it’s tech or not, is where you’re going to see the biggest downturn,” Adatia said.
The basic materials sector finished in positive territory, helped by gold prices. The February gold contract was up US$170.40 from Friday at US$4,765.80 an ounce.
“Canada’s holding up well because of that gold play. It’s also why it outperformed the U.S. last year,” Adatia said.
Gold prices surged 3.7 per cent and silver prices soared 6.9 per cent. Such assets are often considered safe havens in times of geopolitical turmoil.
The Canadian dollar traded for 72.31 cents US compared with 72.10 cents US on Monday.
The March crude oil contract was up US$1.02 from Friday at US$60.36 per barrel.
This report by The Canadian Press was first published Jan. 20, 2026.
— With files from The Associated Press.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
