Investing.com - Canada’s main stock exchange fell lower on Wednesday, as investors eyed a bevy of corporate earnings and key U.S. economic data against indications of a possible easing in aggressive U.S. tariffs.
By the 4:00 ET close, the S&P/TSX 60 index had fallen by 2.2 points, or 0.1%.
Toronto Stock Exchange ’s S&P/TSX composite index declined by 32.8 points or 0.1%, having ended higher on Tuesday by 75.89, or 0.3%, at 24,874.48, notching its highest closing level since April 2.
The uptick came after current Canadian Prime Minister Mark Carney’s Liberals topped the rival Conservatives in a parliamentary election on Monday. The Liberals’ victory was partly fueled by a widespread backlash to U.S. President Donald Trump’s tariffs on Canada and threats to annex the country.
Carney has adopted a tough line with Trump, and has vowed to shepherd the economy through a trade war by lifting public spending.
Canada’s real gross domestic product (GDP) contracted by 0.2% in February 2025, according to a report from Statistics Canada. This decline follows a 0.4% increase in January 2025, with goods-producing industries driving the downturn.
U.S. stocks mixed
U.S. stock indexes finished mixed amid the release of a deluge of economic data and major corporate earnings, as a volatile month comes to an end.
At 4:00 ET closing time, the Dow gained 141.7 points or 0.4%, and the S&P 500 jumped by 8.2 points or 0.2%. The Nasdaq fell 15 points or 0.1% on the day.
The main stock indices closed higher Tuesday, with the Dow Jones Industrial Average gaining 0.8%, and both the S&P 500 index and the NASDAQ Composite adding 0.6%.
It has been a turbulent month on Wall Street, with the major averages gradually narrowing the month’s losses after the announcement of U.S. tariffs at the start prompted heavy selling. The S&P 500 briefly entered a bear market early in April, but is now down just 0.9% this month. The Dow is on pace for a 3.5% loss in April, while the Nasdaq is about 0.9% higher.
Easing trade tensions help tone
Sentiment has been improving on the hope that the worst of the tariffs announcements may be behind the market, helped by Trump’s move to sign two orders on Tuesday to ease the impact of auto tariffs, offering tax credits and tariff relief on materials.
The decision came as Trump visited Michigan, a major auto manufacturing hub, just before a new set of 25% tariffs on auto parts were about to begin.
In another positive note, Commerce Secretary Howard Lutnick told CNBC that the U.S. had reached a deal with one foreign country to permanently ease Trump’s so-called "reciprocal" tariffs. Lutnick did not name the country.
Q1 growth data, PCE inflation awaited
That said, some economic damage may already have been done, as data on Tuesday showed that the consumer confidence index dropped to its lowest reading since May 2020.
Additionally, JOLTS job openings for March fell to 7.192 million from 7.48 million.
The spotlight will now be on the advance GDP estimate for the January-March quarter due later in the session, amid expectations this will show the weakest growth rate since the second quarter of 2022, with a negative read possible.
The other two key releases today were the ADP (NASDAQ: ADP ) employment figures for April and March’s core PCE - the Federal Reserve’s preferred measure of inflation.
The ADP National Employment Report showed that private payrolls had risen by 62,000 in April, slipping from a downwardly-revised 147,000 in March. Economists had seen the number at 114,000, and the fewer jobs are seen as a sign that tariff-fueled uncertainty is weighing on hiring.
The March personal consumption expenditures (PCE) price index, indicated easing inflationary pressures in the U.S., potentially offering the Federal Reserve room to ease monetary policy once more. The PCE price index recorded a 2.3% annual increase during the month, a drop from February’s revised reading of 2.7%.
Meanwhile, a busy earnings week, with about one-third of S&P 500-listed firms slated to post results, continues, with the focus mostly on numbers from software giant Microsoft (NASDAQ: MSFT ) and Facebook-owner Meta (NASDAQ: META ) Platforms.
In Wednesday morning’s earnings, industrial giant Caterpillar Inc (NYSE: CAT ) reported a lower first-quarter profit, hurt by softer demand due to economic uncertainty.
After Wednesday’s close, Meta Platforms reported better-than-expected first-quarter results and upbeat guidance that pointed to increased spending on artificial intelligence cooling fears about slowing AI demand. Microsoft also outperformed expectations, especially due to its Azure cloud business, which grew 33% y-o-y.
Crude set for monthly drop
Oil prices plummeted on Wednesday, on course for their largest monthly drop in more than three years as the global trade war hit demand growth forecasts.
By 6:10 ET, Crude Oil WTI Futures had fallen to to $58.40 per barrel. Brent Oil Futures dropped 3.4% to $61.04 a barrel.
Both contracts have lost over 15% so far this month, the biggest percentage drop since November 2021.
Worries about demand amid the trade war have weighed on investor sentiment, while weak Chinese manufacturing activity data, released earlier Wednesday, has also played into this narrative.
Gold extends losses
Gold prices extended declines, as the Trump administration reduced the impact of auto tariffs, while investors cautiously awaited key U.S. data to gauge the Federal Reserve’s interest rate outlook.
Despite the dip, gold was set for its fourth consecutive monthly rise, with a nearly 6% jump in April so far.
As of 6:10 ET, spot gold fell 0.2% to $3,281.64 per ounce, while gold futures expiring in June lost 0.1% to $3,3294.35 an ounce.
(Scott Kanowsky, Peter Nurse, and Reuters contributed reporting.)