TORONTO 鈥� Canada's main stock index rose Wednesday, led by base metals, industrials and technology, while U.S. markets also gained in the afternoon after news that automakers will get a month-long tariff exemption, one day after the U.S. imposed sweeping levies on Canadian and Mexican goods.
Markets were flat in the first half of the day before sharply rising in a 鈥渟igh of relief鈥� over indications that U.S. President Donald Trump鈥檚 tariffs aren鈥檛 absolute, said Steve Locke, chief investment officer for fixed income and multi-asset strategies at Mackenzie Investments.
U.S. President Trump decided to delay the 25 per cent tariffs for vehicles coming through the Canada-U.S.-Mexico Agreement on trade.
Markets recovered a good chunk of what they lost Tuesday after the tariffs, and Canada's retaliatory tariffs, were implemented. Shares in automakers jumped, with Ford up 5.8 per cent and General Motors up 7.2 per cent.
The S&P/TSX composite closed up 298.82 points at 24,870.82.
In New York, the Dow Jones industrial average was up 485.60 points at 43,006.59. The S&P 500 index was up 64.48 points at 5,842.63, while the Nasdaq composite was up 267.57 points at 18,552.73.
鈥淪eems like the drivers are going to be almost hourly now for markets, because we're seeing a lot of really market-moving headlines,鈥� said Locke.
However, the path ahead is still unclear, with sectors clamouring for exemptions and more tariff deadlines still to come.
Market volatility is expected to continue amid the uncertainty, said Locke.
鈥淭his is something I think markets are going to have to live with for a number of weeks or months to come,鈥� he said.
Regardless of what actually happens, all the uncertainty is bad for the economy, he said. Businesses and consumers will delay decision-making, spending and investments as a result.
鈥淭hose are things that will be a headwind for growth.鈥�
Both the Bank of Canada and the U.S. Federal Reserve are likely to cut interest rates more this year than they would have otherwise, said Locke.
The Bank of Canada is expected to cut later this month, and 鈥渋t鈥檚 likely that they鈥檒l have to cut two or three more times at the very least as we go through the year,鈥� he said.
There are some silver linings on the horizon for investors, said Locke, such as the deregulation and tax cuts expected from the Trump administration.
鈥淭hese things are definitely growth positives, and we have a generally strong U.S. economy that we came into the year with,鈥� he said, though the uncertainty is expected to weigh on growth in the first quarter.
The Canadian dollar traded for 69.59 cents US compared with 69.02 cents US on Tuesday.
The April crude oil contract was down US$1.95 at US$66.31 per barrel and the April natural gas contract was up nine cents at US$4.50 per mmBTU.
The April gold contract was up US$5.40 at US$2,926 an ounce and the May copper contract was up 24 cents at US$4.79 a pound.
鈥� With files from The Associated Press
This report by The Canadian Press was first published March 5, 2025.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
