S&P/TSX Composite Sees Notable Gains, U.S. Markets Experience Rally

By The Canadian Press

TORONTO — On Friday, Canada’s primary stock index climbed over 200 points, primarily fueled by solid performance in the utilities and base metals sectors. Concurrently, U.S. stock markets demonstrated a consistent rally on the final trading day before Donald Trump’s inauguration as president.

Despite the uncertainties facing the market, it marked the strongest week since Trump's election as president. John Zechner, chairman and lead equity manager at J. Zechner Associates, noted, "The risk-on trade seems to have come back in the past week."

The S&P/TSX composite index concluded the day up by 221.72 points, reaching a total of 25,067.92.

In the United States, the Dow Jones industrial average rose by 334.70 points to finish at 43,487.83. The S&P 500 index increased by 59.32 points, settling at 5,996.66, while the Nasdaq composite gained 291.91 points, closing at 19,630.20.

Market growth this week has been fueled by positive earnings reports from major U.S. banks and a growing optimism regarding some of Trump’s anticipated policies, including tax cuts. Zechner referenced a favorable U.S. inflation report earlier in the week that revived hopes for potential interest rate cuts in 2025.

Major technology companies such as Alphabet, Tesla, and Nvidia led this upward momentum in U.S. markets. As Trump’s inauguration looms on Monday, there are anxieties regarding the tariffs he has proposed, which could place upward pressure on inflation amidst an already resilient economy.

Zechner commented, "Unless the economy really starts to break, inflation rates are not dropping. There are so many unknowns."

In Canada, the uncertainty is even more pronounced as investors await clarification on whether these tariffs will be implemented next week. Trump has made a series of significant promises and threats, but actual policy action remains to be seen. Zechner pointed out that when it comes time for execution, the economic landscape is drastically different than it was eight years ago.

“The market’s hanging in relatively well. But, you know, Canada faces a greater likelihood of economic challenges ahead compared to the U.S.,” he stated. Given the weaker Canadian economy, it's expected that the Bank of Canada will continue to lower rates, though this presents complex challenges.

“The more they widen the gap with U.S. rates, which is quite high now, the more it pressures the Canadian dollar,” Zechner added. "There’s a lot we still don’t know."

The Canadian dollar was trading at 69.28 cents U.S., a decrease from 69.50 cents U.S. the previous day. The March crude oil contract fell by 46 cents to settle at US$77.39 per barrel, while the February natural gas contract decreased by 31 cents, reaching US$3.95 per mmBTU.

The February gold contract dropped by US$2.20, settling at US$2,748.70 an ounce, and the March copper contract decreased by seven cents to US$4.37 a pound.

— Based on information from The Associated Press

Stock, Market, Economy