FX.co ★ TSX Retreats From Record High

The S&P/TSX Composite Index saw a slight dip of 0.1%, settling just below 26,380 on Tuesday, in a move away from its record high. This decline is attributed to unpredictable US trade policies and a subdued global growth outlook, both of which are impacting risk assets. Investors are closely monitoring an anticipated dialogue between President Trump and President Xi Jinping, as the possibility of new tariffs poses a threat to export-reliant sectors, especially manufacturing and natural resources, by potentially increasing input costs and limiting market access. The latest reduction in global growth forecasts by the OECD highlights this risk, indicating diminished international demand for Canadian commodities. Concurrently, mixed inflation figures for April have resulted in divided market opinions regarding potential actions by the Bank of Canada, thereby creating ambiguity around the future of rate-sensitive real estate and financial stocks. Although energy companies are marginally buoyed by rising oil prices, the broader TSX index continues to be pressured by ongoing trade tensions, a decline in global demand, and uncertainty surrounding the direction of Canada’s monetary policy.