S&P/TSX Composite Rises Over One Percent Amid Rally in U.S. Markets

Rosa Saba, The Canadian Press

On Friday, Canada’s main stock index, the S&P/TSX Composite, reported a gain of more than one percent, spurred by robust performances from financial and industrial sectors. This surge was mirrored by U.S. markets, which also saw a bounce in the latter part of the afternoon.

In the U.S., the S&P 500 and Nasdaq both climbed by 1.6 percent, while the Dow Jones Industrial Average increased by 1.4 percent. This positive momentum followed a midday decline, triggered by a recent economic report revealing a slight slowdown in inflation and a reduction in consumer spending for January.

According to Pierre-Benoît Gauthier, vice-president of investment strategy at IG Wealth Management, the ongoing trend in the U.S. indicates that economic data has been disappointing. "The data is getting weaker and weaker. Everything that comes out is just a big disappointment," he explained.

Despite the negative outlook, Gauthier noted that this weaker data could provide the U.S. Federal Reserve with the flexibility to lower its main interest rate later in the year, potentially stimulating the economy.

The Federal Reserve has maintained its interest rates so far in 2025, following significant cuts made the previous year, mainly due to worries regarding persistent inflation.

In market updates from New York, the Dow was up by 601.41 points, reaching 43,840.91. The S&P 500 index increased by 92.93 points to 5,954.50, while the Nasdaq composite saw a rise of 302.86 points, landing at 18,847.28. Similarly, the S&P/TSX Composite index closed up 265.21 points at 25,393.45.

Looking ahead, U.S. President Donald Trump is set to implement significant tariffs on Canadian goods next Tuesday, prompting a response from Ottawa with retaliatory tariffs on several American imports.

This shift in sentiment is echoing throughout the equity markets, Gauthier commented. “The whole growth story has been put into question.”

Particularly in the technology sector, where excitement has surged around artificial intelligence, the market has experienced volatility. Nvidia, a leading semiconductor company associated with the AI boom, recently presented earnings that exceeded expectations—but its stock still faced a downturn, signifying that even strong results may not be sufficient for sustained growth. On Friday, Nvidia's stock rebounded, increasing by 3.9 percent.

In contrast, recent data indicated a surprising uptick in Canada’s economic growth, with the fourth quarter GDP achieving an annualized growth rate of 2.6 percent. This growth contrasts with the stagnation experienced in the Canadian economy due to rising interest rates, differing from the resilient performance of its U.S. counterpart.

Economists caution that the data reflects conditions prior to Trump's administration and assert that impending tariffs could negatively affect sentiment and spending on both sides of the border. Gauthier expressed cautious optimism, hoping for tariffs that are not overly burdensome and preferably temporary. "Everything is riding on the tariff talk next week… there’s still a lingering feeling in the market that this will get resolved at the last second," he remarked, though he acknowledged skepticism about this expectation.

As for currency exchanges, the Canadian dollar traded at 69.26 cents US, a slight decrease from 69.34 cents US on Thursday. Additionally, the April crude oil contract dipped by 59 cents, settling at US$69.76 per barrel, while the April natural gas contract fell 10 cents to US$3.83 per mmBTU.

The April gold contract declined by US$47.40, closing at US$2,848.50 an ounce, and the May copper contract experienced a minimal decrease of seven cents, landing at US$4.51 per pound.

— With files from The Associated Press

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