Canada’s main stock index on Friday continued to trim the gains that pushed it to a record closing high two days earlier, as investors retreated to defensive stocks while energy and information technology took a hit.
“It’s been another roller-coaster day in markets, capping off generally strong equity index returns for the month,” said Kathrin Forrest, equity investment director at Capital Group.
The S&P/TSX composite index inched down 35.51 points to 26,175.05.
In New York, the Dow Jones industrial average rose 54.34 points to 42,270.07. The S&P 500 index slipped 0.48 points to 5,911.69, while the Nasdaq dipped 62.11 points to 19,113.77 — but both logged their biggest monthly percentage gains since November 2023.
Investors in the U.S. shored up their stakes in telecom companies, utilities and consumer staples and shied away from resource and IT firms.
“We see the same defensive bias there,” Forrest said of Canada.
“Uncertainty is clearly one of the recurring, underlying themes. And with that you see some volatility” — in energy due to supply concerns and in tech thanks to U.S.-China trade tensions — she said.
“Staples you generally would expect to hold up better in times when there’s some uncertainty around."
The S&P/TSX achieved its third-highest close ever on Friday, in spite of ongoing anxiety over the tariff war.
“Overall, we have continued to see relatively strong underlying economic data,” Forrest said.
“Despite all the headlines and the concerns around trade and uncertainty in that regard, the underlying fundamental data, in particular in the U.S., has largely held up well.”
This week and month on Wall Street have been dominated by questions about what will happen with Trump’s tariffs, which investors worry could grind the economy into a recession, slash companies’ profits and pile even more challenges on households already dealing with the high cost of living.
Hopes had largely been rising that the worst of such worries had passed, which in turn sent stocks rallying, after Trump paused his tariffs on both China and the European Union. A U.S. court then on Wednesday blocked many of Trump’s sweeping tariffs. That allowed the S&P 500 to notch its first winning month in four and its best in a year and a half.
But the tariffs remain in place for now while the White House appeals the ruling by the U.S. Court of International Trade, and the ultimate outcome is still uncertain. Trump also briefly shook markets shortly before Wall Street opened for trading Friday, when he accused China of not living up to its end of the agreement that paused their tariffs against each other.
On Bay Street, investors will be watching whether the Bank of Canada will cut interest rates on Wednesday.
“Currently the market is pricing a 20 per cent chance of a cut. That is down from a 67 per cent chance just two weeks ago,” Forrest said.
The shift stems from a surprising 2.2 per cent annualized rise in economic output in the first quarter of 2025 that Statistics Canada reported Friday, up a tick from 2.1 per cent in the fourth quarter.
Market watchers will also be on the lockout for national employment figures slated to drop on June 6.
The Canadian dollar traded for 72.68 cents US compared with 72.43 cents US on Thursday.
The July crude oil contract was down 15 cents US at US$60.79 per barrel and the July natural gas contract was down seven cents US at US$3.45 per mmBTU.
The August gold contract was down US$28.50 at US$3,315.40 an ounce and the July copper contract was flat at US$4.68 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published May 30, 2025.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Christopher Reynolds, The Canadian Press
