U.S. and Canadian stocks closed solidly in positive territory on Tuesday, after seesawing between modest gains and losses in choppy trading as investors assessed the latest round of corporate earnings, economic data and changes on the trade policy front. The S&P/TSX Composite Index finished at a near four-week high, aided by relief that the uncertainty of the Canadian general election is now in the rear view mirror.
U.S. Treasury Secretary Scott Bessent Tuesday predicted China could lose 10 million jobs quickly due to tariffs, but signaled progress on trade deals with other countries including Japan and India.
The world’s two largest economies have been at the centre of a global trade war, sparked by tariff announcements on April 2 by the Trump administration on countries around the globe, which has stoked investor concerns about rapidly slowing global growth and a rekindling of price pressures.
U.S. President Donald Trump signed an order just before the closing bell on Tuesday that gives automakers building vehicles in the U.S. relief from part of his new 25% vehicle tariffs to allow them time to bring parts supply chains back home.
Automaker shares showed little reaction to the potentially lighter tariffs, and General Motors shares ended 0.6% lower after the company reported strong quarterly results but rescinded its annual forecast.
The TSX ended up 75.89 points, or 0.3%, at 24,874.48, its highest closing level since April 2.
“It’s more about the U.S. earnings that are coming out and we’re also getting a bit of relief post the election in Canada,” said Sid Mokhtari, chief market technician for CIBC Capital Markets.
Prime Minister Mark Carney’s Liberal Party, which retained power in Monday’s election, has promised to support the economy in a trade war through increased spending, including on infrastructure.
The prospect of increased infrastructure spending helps industrials, while recent market volatility could boost banks and other financials that act as trading intermediaries, Mokhtari said.
Both heavily weighted financials and consumer discretionary, which includes auto parts companies, added 0.9% in Toronto.
Shares of Magna International Inc ended 2.2% higher.
Energy was a drag, falling 0.8%, as the price of oil settled 2.6% lower at US$60.42 a barrel.
Gold and copper prices also declined. The materials group, which includes metal mining shares, was down 0.8%.
On Wall Street, the Dow Jones Industrial Average rose 300.03 points, or 0.75%, to 40,527.62, the S&P 500 gained 32.08 points, or 0.58%, to 5,560.83 and the Nasdaq Composite gained 95.19 points, or 0.55%, to 17,461.32.
The blue-chip Dow was led by gains in Honeywell, which jumped 5.4% after reporting a rise in adjusted profit for the first quarter, and paint maker Sherwin-Williams, which rallied 4.8% after its quarterly profit beat estimates.
Also among Dow components, Coca-Cola closed 0.8% higher after beating revenue and profit estimates.
Economic data pointed to an increasing impact from the trade picture. The U.S. trade deficit in goods widened to a record high in March as businesses ramped up efforts to bring in merchandise ahead of tariffs while a separate report from the Conference Board showed its consumer confidence index dropped to its lowest reading since May 2020, while job openings indicated a relatively stable labor market.
“Trump’s tariffs have pushed expectations off a cliff,” said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin. “Maybe the silver lining is that it’ll be hard to not see some improvement in expectations over the next few months.”
More U.S. economic data is due this week, culminating in Friday’s key government payrolls report, along with earnings from several of the “Magnificent Seven” group of megacap stocks such as Apple and Microsoft, with investors likely to home in on any signs of tariff impact.
While each of three major U.S. indexes remains in negative territory for the year, stocks have shown signs of stabilizing in recent weeks, with the S&P 500 registering its sixth straight session of gains, its longest win streak since a seven-day run in November.
HSBC became the latest brokerage to trim its year-end target for the S&P 500 index, cutting it to 5,600 from 6,700 earlier.
In other U.S. stocks, United Parcel Service slipped 0.4% after its quarterly results and said it would cut 20,000 jobs as it sheds deliveries for Amazon.com.
Wells Fargo gained 2.4% after announcing a stock buyback program of up to $40 billion.
Advancing issues outnumbered decliners by a 2.38-to-1 ratio on the NYSE and by a 1.55-to-1 ratio on the Nasdaq. The S&P 500 posted six new 52-week highs and six new lows while the Nasdaq Composite recorded 37 new highs and 59 new lows. Volume on U.S. exchanges was 20.02 billion shares, compared with the 19.46 billion average for the full session over the last 20 trading days.
Reuters, Globe staff