U.S. stocks were lower for a second straight session on Tuesday as comments from U.S. President Donald Trump and Treasury Secretary Scott Bessent provided little clarity to the timeline for any trade deals. Canadian stocks managed to close slightly higher, outperforming Wall Street with the help of rallies in oil and gold prices.
Trump said he and top administration officials will review potential trade deals over the next two weeks to decide which ones to accept. In addition, Trump met with Canadian Prime Minister Mark Carney for the first time, which yielded no immediate results.
Trump’s comments ran somewhat counter to earlier statements from Bessent, who said the administration could announce some trade agreements as early as this week.
“It is all about negotiating the tariffs and Trump talks like he’s going to hit home runs here; he’s going to be very happy if we just get more of a level playing field,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
“The wild card, the big wild card is China, I don’t think the EU is going to be really easy here, I don’t think Canada is going to be easy as well. But China is the big one and certainly they are going to be very tough negotiators, and we might have to go it alone without China for a while.”
In economic data, the Commerce Department said U.S. businesses boosted imports of goods in March ahead of the tariff announcements, pushing the country’s trade deficit to a record high of US$140.5 billion. Canada’s trade deficit narrowed to C$506 million, beating expectations as imports fell at a faster rate than the drop in exports.
The Dow Jones Industrial Average fell 389.83 points, or 0.95%, to 40,829.00, the S&P 500 lost 43.48 points, or 0.77%, to 5,606.90 and the Nasdaq Composite lost 154.58 points, or 0.87%, to 17,689.66.
Late on Monday Trump said he would announce pharmaceutical tariffs over the next two weeks, his latest announcement regarding levies that have whipsawed global financial markets over the past few months.
Health care, down 2.8%, was the worst performing of the 11 major S&P sectors, with Eli Lilly, down 5.6%, and Moderna, off 12.3%, among the biggest drags.
Vaccine makers such as Vertex Pharmaceuticals, which tumbled 10%, saw additional pressure after an internal email seen by Reuters showed the U.S. Food and Drug Administration has named Vinay Prasad, an oncologist who has previously criticized the FDA and was a fierce critic of COVID-19 vaccine and mask mandates, as the director of its Center for Biologics Evaluation and Research.
The S&P/TSX composite index ended up 21.2 points, or 0.1%, at 24,974.72 but stopping short of the one-month high closing level it posted on Friday.
The price of oil recouped some recent declines on signs of higher demand in Europe and China. U.S. crude oil futures settled 3.4% higher at US$59.09 a barrel, which gave the TSX’s energy sector a boost. It rose 1.1% and the materials group, which includes metal miners, was up 3.2% as the price of gold climbed above US$3,400 per ounce.
Industrials and heavily weighted financials both ended 0.4% lower and technology lost 1.3%. It was weighed by a 4.9% decline in the shares of e-commerce company Shopify Inc.
Stocks have been volatile since Trump announced his first round of tariffs on April 2, with the S&P 500 initially dropping nearly 15%, only to stabilize and briefly recover to levels from before the tariffs were announced.
The tariff uncertainty has soured U.S. consumer sentiment data, and many companies have withdrawn their profit outlooks. Comments from Federal Reserve officials, including Chair Jerome Powell, suggest the central bank would be patient before adjusting monetary policy until the impact of tariffs is reflected in economic data.
The Fed started its two-day meeting on Tuesday, with the central bank widely expected to keep interest rates unchanged. Markets are currently pricing in a nearly 80% chance for a cut of at least 25 basis points to occur at the July meeting, according to data compiled by LSEG.
Constellation Energy jumped 10.3% as the best performer on the S&P 500 after its quarterly results, helping to lift the utilities sector 1.2%.
In contrast, shares of data analytics firm Palantir, among the best S&P 500 performers on the year, tumbled 12%, as investors were unimpressed by the company’s modest revenue beat and inline profit.
Declining issues outnumbered advancers by a 1.35-to-1 ratio on the NYSE and by a 1.82-to-1 ratio on the Nasdaq. The S&P 500 posted nine new 52-week highs and nine new lows while the Nasdaq Composite recorded 29 new highs and 106 new lows. Volume on U.S. exchanges was 14.24 billion shares, compared with the 17.95 billion average for the full session over the last 20 trading days.
In currency markets, the Canadian dollar rose to a near seven-month high against its U.S. counterpart as the greenback posted broad-based declines amid worries that Trump’s touted trade deals have yet to materialize.
The loonie in late afternoon trading was 0.4% higher at 1.3775 per U.S. dollar, or 72.60 U.S. cents, after touching its strongest intraday level since Oct. 17 at 1.3751.
The rise in the price of oil also aided the loonie.
Canadian government bond yields eased, tracking moves in U.S. Treasuries. The 10-year was down 3.4 basis points at 3.155%.
Reuters, Globe staff