FX.co ★ TSX Drops as Tariff Relief Eases

The S&P/TSX Composite Index experienced a decline of more than 2%, falling below the 23,200 mark on Thursday. This downturn followed a significant rebound seen the previous day. Investor activity on Bay Street is being subdued by increasing macroeconomic and trade uncertainties. Although a rally was sparked by President Trump's announcement of a 90-day pause on tariffs for most countries, upcoming U.S. inflation data and concerns about potential monetary tightening have caused a shift toward risk aversion. The increase in U.S. Treasury yields is attracting capital to fixed-income investments, drawing it away from riskier stocks. This situation is compounded by ongoing trade tensions, notably the persistent 125% tariff on Chinese imports, which continue to exert pressure on sectors dependent on commodities. Additionally, the volatility in global energy and base metal prices has further cut into the margins of Canadian exporters. The energy sector has been particularly hard hit, with Canadian Natural, Suncor, Imperial Oil, and Cenovus seeing declines between 3.2% and 6.2%. Meanwhile, e-commerce giant Shopify led the losers, with its shares dropping over 7%.