Canada’s main stock index rose on Monday to a record high, with shares of technology companies leading broad-based gains as investors focused on upcoming corporate earnings rather than the latest U.S. tariff threats.
The S&P/TSX composite index ended up 175.60 points, or 0.7 per cent, at 27,198.85, eclipsing Thursday’s record closing high.
The European Union accused the U.S. of resisting efforts to strike a trade deal and warned of countermeasures if no agreement is reached to avoid the punishing tariffs President Donald Trump has threatened to impose starting August 1.
Investors have accepted that there will be some level of U.S. tariffs but expect the duties will not be as severe as proposed, said Sadiq Adatia, chief investment officer, BMO Asset Management.
“The market is just going to back to pure fundamentals of what’s going on globally and particularly what’s going on in the U.S., where the economy is still moving in the right direction,” Adatia said. “Employment seems to be okay, we’re getting into earnings season with a lot of optimism potentially popping through and there’s still probability-wise rate cuts that are expected to happen soon.”
Wall Street’s banking heavyweights are set to report on Tuesday, kicking off second-quarter earnings season.
Canadian consumer price index data for June is also due on Tuesday, which could guide expectations for the Bank of Canada interest rate decision at the end of the month.
Shares of Thomson Reuters Corp jumped 7.7 per cent to hit a record high, with analysts pointing to potential inclusion of the company in the Nasdaq 100 index.
The industrials sector was up 0.9 per cent and technology added 1.9 per cent, helped by a gain of 4.3 per cent for e-commerce company Shopify Inc.
Consumer staples rose 0.7 per cent and real estate ended 0.8 per cent higher.
Of 10 major sectors only energy ended lower. It lost 0.2 per cent as the price of oil fell 2.3 per cent to $66.91 a barrel.
Meanwhile, Wall Street stocks closed marginally up on Monday as investors sidestepped any meaningful moves following U.S. President Donald Trump’s latest tariff threats, and held steady ahead of a busy week of economic data and the start of earnings season.
Trump ramped up trade tensions over the weekend, vowing to slap a 30 per cent tariff on most imports from the European Union and Mexico starting August 1 – leaving the clock ticking for last-minute trade deals.
The EU extended its pause on retaliatory measures until early August, holding out hope for a negotiated truce. The White House said talks with the EU, Canada and Mexico are still underway.
Despite the headlines, investor reaction was muted, having grown numb to Trump’s barrage of tariff threats and his frequent last-minute U-turns.
The Dow Jones Industrial Average rose 88.14 points, or 0.20 per cent, to 44,459.65, the S&P 500 gained 8.81 points, or 0.14 per cent, at 6,268.56 and the Nasdaq Composite advanced 54.80 points, or 0.27 per cent, to 20,640.33.
Trading volume was also subdued, with 15.43 billion shares changing hands, compared with the 17.62 billion average for the last 20 trading days.
Markets have been buoyant in recent weeks even as Trump has rattled his tariff saber.
The Nasdaq Composite ended at a record high, its seventh such achievement since June 27. The S&P 500, which finished a dozen points below last Thursday’s best ever close, has had five records in the same timeframe.
“If anything is holding the market back, it’s the fact we’ve had a pretty good run since April,” said Jason Pride, chief of investment strategy & research at Glenmede.
He noted that despite initial fears that Trump’s tariff policy would hurt the U.S. economy, the levies unveiled so far and the passage of his signature economic legislation last week will broadly offset each other, meaning investors are starting to be more confident about the economy’s growth prospects.
Signs of how Trump’s policies are playing out will come this week, with a raft of new reports on the state of the U.S. economy due up.
Tuesday is also the scheduled release of the latest consumer price data, which is expected to reveal an inflation uptick in June as sellers started passing on the cost of sweeping tariffs.
Wednesday’s producer and import price reports will offer fresh insight into how supply chain pressures are shaping up.
One place where Trump’s tariff rhetoric still moved markets was crude prices, with U.S. benchmark oil dropping 2.2 per cent after he threatened levies on buyers of Russian exports, which may have knock-on effects on global energy supplies.
A majority of the sectors closed in positive territory though, led by the 0.7 per cent advance by communication services . It was helped by gains in Netflix, which reports earnings on Thursday, and Warner Bros. Discovery , whose latest Superman caper had a strong opening weekend at the box office.
Crypto stocks ticked up after Bitcoin topped $120,000 for the first time. Coinbase rose 1.8 per cent, and MicroStrategy gained 3.8 per cent.
Waters Corp dropped 13.8 per cent after the lab equipment maker agreed to merge with rival Becton, Dickinson and Company’s Biosciences & Diagnostic Solutions unit in a $17.5 billion deal.
– Reuters
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