TORONTO — Canada's main stock index managed a slight gain Thursday while U.S. markets closed down on a choppy day that included headlines on trade tensions softening as well as a very public fallout between U.S. President Donald Trump and Elon Musk.
Markets were mixed throughout the day as Canada reported a record trade deficit and high-level trade talks with the U.S. continued, while in the U.S. data showed more workers applied for unemployment following on a weak job report out Wednesday, as well as news of talks between U.S. President Donald Trump and Chinese President Xi.
"It's been a very interesting day from a headline perspective," said Macan Nia, co-chief investment strategist with Manulife Investment Management.
The S&P/TSX composite index closed up 13.29 points at 26,342.29, a day after the U.S. doubled tariffs on steel and aluminum imports, but Nia said the move isn't leading to big swings in the market.
"The TSX has been less impacted by the headlines coming from the tariff implications on aluminum and steel," he said.
"When it comes to any of these tariff policies, given what we have experienced over the last couple of months, not everything is set in stone."
Markets were shown how quickly the situation could change Thursday after Trump and Musk began to feud online, leading to Tesla's stock closing down more than 14 per cent and erasing earlier gains for the Nasdaq.
In New York, the Dow Jones industrial average was down 108.00 points at 42,319.74. The S&P 500 index was down 31.51 points at 5,939.30, while the Nasdaq composite was down 162.04 points at 19,298.45.
While it's unclear what firm changes might result from the fallout between Trump and his wealthiest backer, investors will be keen to see hard data Friday that will show the results so far of Trump's economic policies.
Nia said investors will be eager to see if the jobs numbers reflect some of the worsening outlook and sentiment, or continues to show resilience as economic data has shown in recent months.
"Investors are waiting to see at what point does that soft data, which is really feelings, right, will it start impacting the hard data, which are facts," he said.
"And to be honest, we're seeing some cracks in that armour."
Canada's trade deficit, coming in at $7.1 billion for April, also showed some of the hard impacts of disruptive trade policies, but wasn't much of a surprise given what's been going on, he said.
Despite the data, the Canadian dollar continued a recent trend up, trading for 73.21 cents US compared with 73.12 cents US on Wednesday.
"What has been driving it up (recently) is markets surprisingly are pricing in that the Fed is going to be more aggressive for the remainder of the year compared to the Bank of Canada," said Nia.
"We find challenges in that narrative when you look at the economic data between our two countries, the Canadian economic landscape is much weaker than the U.S."
The July crude oil contract was up 52 cents US at US$63.37 per barrel and the July natural gas contract was down four cents US at US$3.68 per mmBTU.
The August gold contract was down US$24.10 at US$3,375.10 an ounce and the July copper contract was up four cents US at US$4.93 a pound.
This report by The Canadian Press was first published June 5, 2025.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press
