TSX ends slightly lower as Trump tariff threat hits sentiment

Canada’s stock market inched lower on Tuesday, weighed by declines for energy, railroad and auto parts manufacturing shares, after U.S. President-elect Donald Trump vowed to impose big tariffs on top trading partners, including Canada. U.S. stocks rose as investors digested both the tariff pledges and the latest minutes from the Federal Reserve, with both the S&P 500 and Nasdaq at record highs.
The S&P/TSX composite index ended down 5.21 points, or 0.02%, at 25,405.14, its second straight day of modest declines after posting a record closing high on Friday.
Trump on Monday pledged big tariffs on the United States’ three largest trading partners – Canada, Mexico and China – in a move that helped push the Canadian dollar to a 4-1/2-year low against its U.S. counterpart. Officials from Mexico, Canada and China warned that Trump’s tariff threat would harm the economies of all involved.
Trump’s plan does not exempt crude oil from trade penalties, initial reports suggested. The Toronto market’s energy sector was down about 1% and underperformed U.S. energy stocks. U.S. crude futures settled 0.25% lower at US$68.77 a barrel after Israel agreed to a ceasefire deal with Lebanon.
Industrials in Toronto fell 1%, weighed by declines for railroad shares. Automotive suppliers also lost ground, with Magna International Inc falling 4.7%. Business jet manufacturer Bombardier Inc lost 9.3%.
Helping to limit the decline on Tuesday, technology rose 1.1% and financials added 0.5%.
U.S. short-term interest-rate futures pared earlier losses after the Fed’s latest minutes showed officials appeared divided over how much further they may need to cut interest rates.
The minutes of the Nov. 6-7 meeting also showed the group agreed this was a moment to avoid giving much concrete guidance about how U.S. monetary policy is likely to evolve in the weeks ahead.
“The minutes did nothing to alter my view that the policy rate is going to be adjusted lower next week and will continue to do so through the next calendar year,” said Jamie Cox, managing partner for Harris Financial Group.
Other analysts were more cautious.
Paul Ashworth, chief North America economist for Capital Economics, noted that he still expects another 25 basis-point cut, but cautioned such decisions are data-dependent and therefore November’s employment and inflation data will be pivotal.
In U.S. trading, GM shares plunged nearly 9% in response to the tariff threat, which – if enacted – would send the closely integrated North American auto industry into chaos.
The Dow Jones Industrial Average rose 123.74 points, or 0.28%, to 44,860.31, the S&P 500 gained 34.26 points, or 0.57%, to 6,021.63 and the Nasdaq Composite gained 119.46 points, or 0.63%, to 19,174.30.
Gains in megacaps such as Microsoft and Apple boosted the information technology sector and the tech-heavy Nasdaq. Microsoft shares rose a little over 2%.
Wells Fargo rose 0.6%, standing out among sluggish banking stocks, after Reuters reported, citing sources, that the bank is in the last stages of a process to pass regulatory tests to lift a $1.95 trillion asset cap next year after fixing problems from its scandal over fake accounts.
The blue-chip Dow was weighed down by declines in Amgen, which slid about 4.8% after its experimental obesity drug fell short of expectations.
Among others, Eli Lilly rose 4.6% after U.S. President Joe Biden proposed expanding Medicare and Medicaid coverage for anti-obesity drugs.
Declining issues outnumbered advancers by a 1.57-to-1 ratio on the NYSE. There were 358 new highs and 52 new lows on the NYSE. The S&P 500 posted 63 new 52-week highs and 3 new lows while the Nasdaq Composite recorded 124 new highs and 91 new lows.
Reuters, Globe staff