Canada’s main stock index rose on Friday as financial and industrial shares notched gains, while investors assessed the economic impact of the latest U.S. tariffs.
The S&P/TSX Composite index ended up 176.44 points, or 0.5%, at 35,369.10 but stopped short of the record closing high it posted on Wednesday. For the week, the index was up 0.3%.
The United States imposed new tariffs of 10% and 12.5% on goods from 60 trading partners, including the European Union and China. On Monday, the U.S. unveiled 50% tariffs on a wide range of imports from Canada, which are set to take effect on August 19.
“For the most part, markets have long since become inured to the trade wars and mostly shrugged off the latest tariff news,” Douglas Porter, chief economist at BMO Capital Markets, said in a note. “However, the series of announcements and threats served as a rather loud reminder that trade will act as a drag on growth for some time yet, particularly so in Canada.”
U.S. crude futures settled 3.1% lower at $89.31 a barrel after sources told Reuters that China had initiated a push to resume stalled peace talks between the U.S. and Iran.
Still, oil notched a hefty weekly gain, which has raised the inflation outlook as well as expectations for Federal Reserve interest rate hikes. The U.S. central bank is due to make a policy decision on Wednesday.
Heavily weighted financials rose 0.8%, with shares of investment management company Onex adding 3.1%.
Industrials were up 0.6%, led by trucking firm Mullen Group, which ended 7.2% higher.
The interest-rate-sensitive real estate sector advanced 1.7% as bond yields fell.
Energy capped the TSX’s gains, falling 0.8%.
On Wall Street, the tech-heavy Nasdaq fell on Friday as investors sold chip stocks on worries about massive spending on artificial intelligence ahead of the next batch of megacap earnings reports, while falling oil prices provided Wall Street with some support even as Middle East hostilities continued.
The S&P 500 barely advanced and its biggest weight came from the S&P 500 technology index, which underperformed the broader market to finish down 0.88%, as chip stocks fell.
While investors looked ahead to next week’s results from megacaps Microsoft, Amazon.com, Meta and Apple Inc, their enthusiasm has waned since Alphabet’s announcement, late on Wednesday, of a massive hike to its capital spending plans even as it burns cash.
After piling into technology stocks in recent years on the promise of growth from AI, investors have become worried about the need for ever-increasing capital outlays for AI, according to Peter Andersen, CEO of Andersen Capital Management.
“People are thinking, how do we make sense of all this spending, and how much more patient do we have to be before we actually see it translate to actual profits?” Andersen said.
“The fear of missing out is becoming more like a fear of massive overbuilding.”
Late on Thursday, Intel forecast quarterly profit and revenue above Wall Street estimates and outlined plans to increase spending over the next two years. Still, the chipmaker’s shares sank to close down 7.9% on Friday in sympathy with the Philadelphia SE Semiconductor index, which dropped 4.5%.
The Dow Jones Industrial Average rose 235.60 points, or 0.46%, to 51,947.25, the S&P 500 gained 3.68 points, or 0.05%, to 7,411.98 and the Nasdaq Composite lost 161.87 points, or 0.64%, to 24,975.82. For the week, the Dow fell 0.4%, its third straight weekly loss.
The S&P 500 and the Nasdaq registered their second straight week in the red with the S&P falling 0.6% while the Nasdaq lost 2%.
Among the S&P 500’s 11 major industry indexes, real estate was the strongest, with a 2.4% advance. The sector’s leading gainer was Digital Realty Trust, which rallied 11% after it raised its full-year forecast for funds from operations. The second-biggest sector gainer was materials which rose 1.44% as investors turned their attention to paper and packaging companies. International Paper led the pack with an 11.2% advance, making it the S&P 500’s biggest percentage gainer on the day. It was followed closely by the U.S.-traded shares of paper company Smurfit Westrock, which added 11.1%.
– Reuters, Globe staff