Canadian and American markets tumbled Friday amid inflation worries and uncertainty over the scale and scope of the next round of U.S. tariffs set to kick in April 2.
The S&P/TSX composite index was down 1.6 per cent, or 401.91 points, at 24,759.15.
In New York, the Dow Jones industrial average finished down 715.80 points at 41,583.90. The S&P 500 index was down 112.37 points at 5,580.94, while the Nasdaq composite was down 481.04 points at 17,322.99.
Investors are rattled despite a somewhat softer tone from the Trump administration on Friday and a history of tariffs being rolled back or paused at the last minute, said Brianne Gardner, senior wealth manager of Velocity Investment Partners at Raymond James Ltd.
“The mixed messaging is definitely the problem,” she said.
“The one thing that markets don’t like more than negative news or data is really the unknown. People aren’t sure of how to navigate that.”
Prime Minister Mark Carney and U.S. President Donald Trump both struck a positive note after their Friday morning phone call. The Prime Minister’s Office called the conversation “constructive” and the president called it “extremely productive.”
Carney said the two countries would be negotiating a “new economic and security relationship,” while Trump told reporters in Washington that “things are going to work out very well” between Canada and the U.S.
“Reciprocal” tariffs, which would increase U.S. duties to match tax rates other countries charge on imports, are set to take effect on Wednesday, and Carney has said Canada would retaliate.
Trump has also said he would impose a 25 per cent tariff on automobile and auto parts imports starting Thursday, but it’s unclear how severely Canada would be affected.
Meanwhile, Statistics Canada said real gross domestic product rose 0.4 per cent in January and that its flash estimates for February suggest flat growth for the month.
Even though the Canadian economy seemed to start the year on solid footing, Gardner said she’s looking at the ongoing trade risks and signs of waning consumer confidence.
“I still think we will continue to see weakening economic data out of Canada,” she said, adding an interest-rate cut from the Bank of Canada next month is possible.
Shares in Vancouver-based Lululemon Athletica Inc. closed down 14 per cent on the NASDAQ to US$293.06 a day after the apparel retailer’s CEO told an investor conference call that U.S. consumers appeared to be holding back due to economic worries.
“I think the retail and consumer discretionary space is going to get hit as we’re seeing slower consumer spending,” said Gardner.
Precious metals miners, utilities and consumer staples have provided a safe haven amid the volatility, she added.
“More defensive sectors have been kind of those shining pockets of opportunities.”
The Canadian dollar closed at 69.90 cents US compared with 69.89 cents US on Thursday.
The May crude oil contract settled down 56 cents at US$69.36 per barrel and the May natural gas contract rose 14 cents to US$4.07 per mmBTU.
The June gold contract was up US$23.40 at US$3,114.30 an ounce and the May copper contract was up a penny at US$5.13 a pound.
This report by The Canadian Press was first published March 28, 2025.
Companies in this story: (TSX: GSPTSE, TSX: CADUSD)
