Canada’s commodity-linked main stock index fell on Wednesday as lower oil prices weighed on energy shares and investors awaited greater clarity on the global trade outlook.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 97.64 points, or 0.4%, at 26,329.00, after posting a record closing high on Tuesday.
Canada’s labour union Unifor called for retaliatory tariffs on U.S. steel and aluminium as the U.S. government doubled the levies to 50%.
“The market has become a little insensitive to all the trade headlines until we have something more concrete”, said Angelo Kourkafas, senior global investment strategist at Edward Jones.
“There’s been a lot of reversals in these news headlines, while at the same time economic data have continued to come in pretty strong, which has allowed the markets to look a little bit past those headlines.”
The downturn in Canada’s services economy eased somewhat in May as firms grew more hopeful that trade and political uncertainty would become less of a drag on activity over the coming 12 months, S&P Global’s Canada services PMI data showed. The BoC held its benchmark rate at 2.75%, citing the need to probe the effects of U.S. trade policy, but said another cut might be necessary if the economy weakened in the face of tariffs.
“Going forward, we think the path of the BoC will be largely determined by the extent of further softening in the economy,” Claire Fan, a senior economist at Royal Bank of Canada, said in a note.
The energy sector fell 1.8% as the price of oil settled 0.9% lower at $62.85 a barrel, pressured by U.S. data that showed a large build in fuel stocks.
Canadian Natural Resources CNQ.TO has restarted its Jackfish 1 oil sands site in northern Alberta after determining wildfires in the region were a safe distance away. The company’s shares fell 1.9%, while the utilities group lost 1% and consumer staples ended 1.2% lower.
The materials sector, which includes metal mining shares, added 0.6% as gold and copper prices rose.
NovaGold Resources Inc shares jumped nearly 24% and shares of Algoma Steel Group Inc ended up 3.3%.
The benchmark S&P 500 stock index ended modestly higher on Wednesday, supported by technology shares, but some early gains evaporated as weak data revealed the economic toll taken by President Donald Trump’s erratic trade policies.
The services sector contracted in May for the first time in nearly a year, while businesses paid higher input prices, a reminder that the economy was still at risk of slowing growth and rising inflation.
“Tariff impacts are likely elevating prices paid by services sector companies,” said Jeffrey Roach, chief economist for LPL Financial.
The ADP National Employment Report showed U.S. private employers in May added the fewest number of workers in more than two years. Investors await Friday’s nonfarm-payrolls data for more signs on how trade uncertainty is affecting the U.S. labor market.
Washington doubled tariffs on imported steel and aluminum to 50%, and Wednesday was also Trump’s deadline for trading partners to make their best offers to avoid other punishing import levies from taking effect in early July.
Investors focused on tariff negotiations between Washington and trading partners, with Trump and Chinese leader Xi Jinping expected to speak sometime this week as tensions simmer between the world’s two biggest economies.
“If we can’t get to an agreement on China, the tariff battle will be a headline issue for many months to come and will have an impact on both domestic and international economies,” said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
May saw the biggest monthly increases for the S&P 500 index and the tech-heavy Nasdaq since November 2023, thanks to a softening of Trump’s harsh trade stance and upbeat earnings reports.
The S&P 500 remains more than 2% below record highs touched in February.
Barclays joined a slew of brokerages in raising its year-end price target for the S&P 500, pointing to easing trade uncertainty and expectations of normalized earnings growth in 2026.
According to preliminary data, the S&P 500 gained 0.79 points, or 0.01%, to end at 5,970.89 points, while the Nasdaq Composite gained 67.46 points, or 0.35%, to 19,466.42. The Dow Jones Industrial Average fell 84.13 points, or 0.20%, to 42,435.51.
Shares of Hewlett Packard Enterprise rose as demand for artificial-intelligence servers and hybrid cloud segment helped second-quarter revenue and profit beat estimates.
GlobalFoundries rose 1.5% after the chip manufacturer announced plans to increase investments to $16 billion.
Shares of the fourth-largest U.S. bank Wells Fargo briefly hit a three-month high after the Federal Reserve lifted a longstanding $1.95 trillion cap on its assets.
Wells Fargo CEO Charlie Scharf told Reuters he expects the bank to grow in all businesses including wealth, commercial and investment banking and credit cards, but not mortgages.
Tesla fell as the electric-vehicle maker’s sales dropped for the fifth straight month in big European markets.
Shares of cybersecurity firm CrowdStrike slumped after it forecast quarterly revenue below estimates.
Dollar Tree dropped as the discount store operator forecast second-quarter adjusted profit could fall as much as 50% from a year ago due to tariff-driven volatility. (
Reuters and The Associated Press