Canada’s main stock index edged lower on Friday as energy and metal mining shares lost ground, but the index still posted its biggest monthly advance since November, helped by easing global trade tensions.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 35.51 points, or 0.1%, at 26,175.05, its second straight day of declines after posting a record closing high on Wednesday. For May, the index was up 5.4%.
“I wouldn’t be surprised to see some consolidation after a big run, but intermediate-term the path of least resistance is up,” said Joseph Abramson, co-chief investment officer at Northland Wealth Management. “I think that political risk has peaked in terms of tariffs.”
The U.S. has suspended in recent weeks some of the sweeping tariffs it has imposed on goods from other countries, while Canada’s economy has fared better during the first few months of the global trade war than some economists had expected.
Canadian gross domestic product increased at an annualized rate of 2.2% in the first quarter, beating estimates for a gain of 1.7%.
The energy sector fell 1.8% on Friday as the price of oil settled 0.25% lower at $60.79 a barrel and after oil sands company MEG Energy said it evacuated all nonessential workers from its Christina Lake production facility in northern Alberta due to wildfires burning in the area. The company’s shares ended 2.8% lower.
The materials group, which includes metal mining shares, also lost ground as the price of gold dipped.
Heavily weighted financials added 0.2%, and were up 1.3% for the week in which Canada’s biggest banks reported quarterly earnings.
The S&P 500 ended a volatile session nearly flat, as U.S. President Donald Trump slammed China before sounding upbeat about reaching a trade deal, but the benchmark U.S. index closed out its best month since November 2023.
May was a choppy month for stocks as Trump’s erratic trade policies kept investors on edge, but his softening tariff stance, along with upbeat earnings and tame inflation data, helped the S&P 500 rebound from its April lows.
On Friday, all three major stock indexes opened lower after Trump accused China on his Truth Social platform of breaching a trade agreement with the U.S. and issued a new veiled threat to get tougher with Beijing.
But the market pared losses as Trump said on Friday afternoon he will speak to China’s President Xi Jinping and hopefully work out their differences on trade and tariffs.
Strategists said the constant stream of tariff news is unnerving.
Investors “don’t know how to react to tariff” news at this point, said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma. “The news cycle is maddening.”
The Dow Jones Industrial Average rose 54.34 points, or 0.13%, to 42,270.07. The S&P 500 lost 0.48 points, or 0.01%, at 5,911.69 and the Nasdaq Composite fell 62.11 points, or 0.32%, to 19,113.77.
The S&P 500 also finished Friday with a weekly gain that lifted it less than 4% from its February all-time high. The benchmark index rose about 6.2% in May, while the Nasdaq surged 9.6% for the month.
“February, March and April was one of the worst three-month periods since COVID, so we needed some gains,” Dollarhide said.
While the effective U.S. tariff on imports was 2% to 3% before Trump took office, it stands at about 15%, according to Oxford Research estimates. This would have been lowered to about 6% by a trade court ruling, but an appeals court’s emergency stay has kept the higher rate in place for now.
Investors on Friday also digested data showing U.S. consumer spending increased 2.1% year-on-year in April after advancing 2.3% in March. The Federal Reserve tracks the PCE price measures for its 2% inflation target.
Traders maintained bets that the U.S. central bank would cut its target for short-term borrowing costs in September.
On the earnings front, shares of Ulta Beauty jumped 11.8% after the cosmetics retailer raised its annual profit forecast after beating quarterly results.
Declining issues outnumbered advancers by a 1.14-to-1 ratio on the NYSE. There were 94 new highs and 62 new lows on the NYSE.
On the Nasdaq, 1,849 stocks rose and 2,651 fell as declining issues outnumbered advancers by a 1.43-to-1 ratio.
Volume on U.S. exchanges was 19.34 billion shares, compared with the roughly 18 billion average for the full session over the last 20 trading days.
Reuters, Globe staff