Trade war turmoil topples Canada's main financial market from its all-time high

DAMIAN J. TROISE

Fri, Mar 14, 2025, 7:48 AM 2 min read

NEW YORK (AP) — Trade warfare turmoil is weighing heavy connected fiscal markets successful Canada.

Canada's main banal scale has been tumbling on with U.S. indexes since President Donald Trump initiated a commercialized warfare with his North American neighbors. Mexico's main banal scale has remained comparatively dependable pursuing measures from the Mexican authorities to stabilize fiscal markets.

The Toronto Stock Exchange’s S&P/TSX composite scale reached an all-time precocious connected Jan. 30. It started sliding a time aboriginal pursuing the archetypal salvo successful the signifier of announced 25% tariffs connected each goods from Canada and Mexico. Since then, Trump has rattled markets with uncertainty arsenic helium changes his caput connected implementing oregon delaying tariffs connected a seemingly regular basis.

The S&P/TSX composite has shed astir 5% since Trump opened the commercialized warfare connected Jan. 31. The fiscal assemblage is among the hardest hit, with a 8.6% drop. The concern assemblage is down 7.4%, portion the vigor assemblage has shed 5.4%.

U.S. markets person besides been tumbling, with the S&P 500, a cardinal benchmark for the market's health, notching a 10% diminution from its all-time precocious acceptable successful February. Investors person somewhat antithetic concerns depending connected which broadside of the borderline they're standing.

In Canada, the concerns are focused connected the interaction to growth, said Frances Donald, main economist astatine RBC. Specifically, investments could stall and unemployment could rise.

“This uncertainty, successful and of itself, is already creating pain,” she said.

In the U.S., though, determination are rising concerns astir inflation.

The Federal Reserve helped chill rising ostentation by raising involvement rates and it felt comfy capable with the downward trajectory to commencement cutting rates astatine the extremity of 2024. The complaint of ostentation successful the U.S. has eased adjacent to the cardinal bank's extremity of 2%, but the Fed mightiness person occupation dousing a reignition.

A survey released Friday by the University of Michigan showed that consumers are bracing for higher ostentation successful the future, with expectations for the agelong word jumping to 3.9% from past month’s prediction of 3.5%. That’s the biggest month-over-month leap since 1993.

The complaint of ostentation successful Canada is already beneath 2% and its cardinal slope could person an easier clip dealing with an increase. The Bank of Canada precocious trimmed its overnight involvement complaint a quarter-point to 2.75%, marking its 7th consecutive complaint cut.