U.S. and Canadian stocks ended lower on Friday after President Donald Trump intensified his tariff offensive against Canada, amplifying the uncertainty swirling around U.S. trade policy.
Trump late on Thursday ramped up his tariff assault on Canada, saying the U.S. would impose a 35% tariff on imports next month and planned to impose blanket tariffs of 15% or 20% on most other trading partners.
The S&P 500 eased from a record high the day before, with caution prevailing after Trump on Thursday imposed 50% tariffs on Brazil and as the European Union braced for a possible letter from Trump with details on fresh tariffs.
“The increased rhetoric around tariffs, what we’ve seen this week regarding Brazil and Canada, is certainly elevating the anxiety level,” said Michael James, an equity sales trader at Rosenblatt Securities. “People had become a little more accustomed to the lack of negative tariff headlines, and we’ve kind of been reminded that the tariff picture is still there.”
Domestically Friday, investors also weighed domestic jobs data that clipped expectations the Bank of Canada would resume its easing campaign.
The Canadian economy added 83,100 jobs in June and the unemployment rate surprisingly dipped to a level of 6.9% from 7% in May. Money markets see a 13% chance the BoC cuts its benchmark interest rate at the next policy decision on July 30, down from 27% before the jobs data.
The S&P/TSX composite index ended down 59.05 points, or 0.22%, at 27,023.25, after notching a record closing high on Thursday. For the week, the index was barely changed, posting a decline of 0.05%.
“Clearly, the U.S. is pushing for more concessions,” said Ian Chong, a portfolio manager at First Avenue Investment Counsel. “They’re playing a little bit of hardball here, so not good for Canada and the TSX.”
The TSX technology sector fell 1.6%, with shares of software company Open Text Corp down 4.0%.
Consumer staples lost 0.9% and heavily weighted financials ended 0.6% lower.
Four of the 10 major TSX sectors ended higher. Energy added 1.2% as the price of oil settled up 2.8% at US$68.45 a barrel.
The price of gold also rose, climbing 1%. The materials group, which includes metal mining shares, gained 0.9%.
Aritzia Inc reported first-quarter results that beat expectations. Shares of the fashion retailer ended 1.5% higher.
In the U.S. market, shares of Nvidia rose 0.5% to a record high, lifting its stock market value to US$4.02 trillion.
Drone makers AeroVironment and Kratos Defense & Security Solutions jumped about 11% after U.S. Defense Secretary Pete Hegseth ordered a surge in drone production and deployment.
The S&P 500 declined 0.33% to end the session at 6,259.75 points.
The Nasdaq declined 0.22% to 20,585.53 points, while the Dow Jones Industrial Average fell 0.63% to 44,371.51 points.
Volume on U.S. exchanges was relatively light, with 15.4 billion shares traded, compared with an average of 18.3 billion shares over the previous 20 sessions.
For the week, the S&P 500 dipped 0.3%, the Dow lost about 1% and the Nasdaq slipped 0.1%.
The S&P 500 is up about 6% so far in 2025.
Investors will soon turn their attention to second-quarter reporting season, with a focus on how Trump’s on-again off-again tariffs are affecting major U.S. companies. Among the big names reporting results next week are JPMorgan, Netflix and Johnson & Johnson.
Analysts on average expect S&P 500 companies to increase their second-quarter earnings by 5.7%, year over year, with big gains from tech companies and declining profits in energy, consumer staples and consumer discretionary, according to LSEG I/B/E/S.
“We believe expectations are a bit low for S&P 500 earnings. Much of the second quarter was marked with tariff and trade issues and that may have caused some dislocations in earnings,” said Michael Landsberg, chief investment officer, Landsberg Bennett Private Wealth Management.
Levi Strauss & Co jumped 11% after the apparel seller raised its annual revenue and profit forecasts and beat quarterly estimates.
Meta Platforms shares closed 1.3% lower after Reuters reported that the company is very unlikely to offer more changes to its pay-or-consent model, increasing the risk of fresh EU antitrust charges and hefty daily fines.
Kraft Heinz closed 2.5% higher after the Wall Street Journal reported the company is preparing to break itself up as the packaged food maker grapples with persistent weakness in demand for its higher-priced brands.
Across the U.S. stock market, declining stocks outnumbered rising ones by a 2.8-to-one ratio.
The S&P 500 posted 12 new highs and 4 new lows; the Nasdaq recorded 58 new highs and 43 new lows.
- Reuters, Globe staff