Canada’s main stock index advanced on Friday, led by gains in materials stocks, following strong earnings from U.S. big banks including JPMorgan, while investors treaded carefully amidst heightened U.S.-China trade tensions.
Toronto Stock Exchange’s S&P/TSX Composite Index rose by 0.7% to 23,167.43 points, maintaining its momentum towards a weekly gain, provided the uptick sustains.
As earnings season kicked in, profits at major U.S. banks beat estimates in the first quarter as stock trading jumped, but executives warned that the sweeping tariffs could fuel risks and weigh on economic growth.
Meanwhile, China raised its tariffs on U.S. imports to 125%, retaliating against U.S. President Donald Trump’s increase of duties on Chinese goods to 145%, intensifying the ongoing trade war between the two largest economies that threatens to upend global supply chains.
Earlier this week, Trump paused duties for dozens of countries for 90 days giving markets a brief reprieve, but concerns returned with the ongoing conflict with China, fueling fears of a recession.
“Uncertainty and volatility will continue throughout”, said Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth.
“The banks looks good sure, but any negativity out of the White House, and that’ll all be erased very quickly.”
On TSX, materials gained 4.1%, tracking bullion’s rise after the safe-haven metal surpassed the key $3,200 mark for the first time.
Heavyweight financial stocks were up 0.8%, after positive corporate results from U.S. peers. Sprott led the gains in the index, up 2.7%.
Bucking the trend, information technology fell 1.6%, with shares of e-commerce company Shopify slipping 5.6%.
Separately, data showed U.S. monthly producer prices unexpectedly fell in March amid a sharp decline in the cost of energy products, but tariffs on imports are expected to drive inflation higher in the coming months.
The University of Michigan Surveys of Consumers said its Consumer Sentiment Index in the U.S. dropped to 50.8 this month, compared to a forecast of 54.5.
Back home, Canadian Prime Minister Mark Carney is set to convene a meeting with his top cabinet colleagues later in the day to discuss the threat posed by U.S. tariffs.
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