TORONTO — Stock markets in Canada and the U.S. plunged in midday trading as investors reacted to the latest tariffs from U.S. President Donald Trump, while the loonie climbed higher compared with the U.S. dollar.
TORONTO — Stock markets in Canada and the U.S. plunged in midday trading as investors reacted to the latest tariffs from U.S. President Donald Trump, while the loonie climbed higher compared with the U.S. dollar.
TORONTO — Stock markets in Canada and the U.S. plunged in midday trading as investors reacted to the latest tariffs from U.S. President Donald Trump, while the loonie climbed higher compared with the U.S. dollar.
“I think everybody was underestimating what we were going to see out of Trump, and obviously that’s being reflected in an adjustment today to the markets, and a material adjustment,” said Martin Pelletier, senior portfolio manager at Wellington-Altus Private Counsel Inc.
The S&P/TSX composite index was down 826.76 points or 3.2 per cent at 24,480.42 as markets worried the latest round of U.S. tariffs could sink the global economy into a recession.
In New York, the Dow Jones industrial average was down 1,447.65 points at 40,777.67. The S&P 500 index was down 233.69 points at 5,437.28, while the Nasdaq composite was down 951.96 points at 16,649.09.
After the bell on Wednesday, U.S. President Donald Trump announced so-called “reciprocal tariffs” hitting just about every country around the world including a new 20 per cent tariff on the European Union and a 34 per cent levy on imports from China.
Major tech stocks led the way down, as companies like Apple stand to be affected by tariffs on countries like China, said Pelletier. Even gold, which has been hitting highs as investors seek a safe haven, was down.
The fresh round of levies sparked concerns by economists that they could drag the global economy into a recession. Tariffs are widely expected to be inflationary, as are Canada’s retaliatory tariffs. They are also likely to weigh on economic growth.
Trump seems to view this possibility as a short-term pain point that will be worth the longer-term shift he’s looking for, said Pelletier.
The drop in North American markets followed similar moves on markets in Europe and Asia following the news.
Of course, there’s still plenty of uncertainty for investors, said Pelletier. The latest announcement by Trump came after a couple months of tariff threats, announcements, exemptions and delays, so it’s possible what was laid out on Wednesday isn’t the final story.
“Having said that, there are some important signals in the market that this is a major structural shift by the U.S. administration,” he said.
“Is the market overreacting to what we saw yesterday? We don’t know, but it certainly is adjusting its expectations more to the downside risks than the upside recovery.”
The Canadian dollar traded for 71.26 cents US compared with 69.83 cents US on Wednesday.
“The U.S. dollar is selling off against all major currencies,” said Pelletier, leading to strength for the loonie.
The May crude oil contract was down US$5.71 at US$66.00 per barrel and the May natural gas contract was up seven cents US at US$4.13 per mmBTU.
The June gold contract was down US$17.70 at US$3,148.50 an ounce and the May copper contract was down 18 cents US at US$4.86 a pound.
This report by The Canadian Press was first published April 3, 2025.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press