Stock market climbs due to tech sector growth; focus remains on trade developments
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The trade landscape between Canada and the United States remains uncertain as the August 1 tariff deadline approaches, with no final agreement in sight. Meanwhile, the Toronto Stock Exchange and various economic indicators have shown a mix of positive and negative trends.
Trade Negotiations and Tariffs
As of August 1, 2025, Canada and the United States have not finalized a trade agreement ahead of the tariff deadline set by U.S. President Donald Trump. Prime Minister Mark Carney has indicated that while talks are ongoing and in an intense phase, it is possible but not certain they will conclude by the August 1 deadline[1][2].
President Trump has threatened to impose a 35 percent tariff on Canadian goods that do not comply with the Canada-U.S.-Mexico Agreement (CUSMA), increasing from the current 25 percent tariff enacted under emergency powers citing national security concerns due to fentanyl trafficking. The tariffs primarily impact sectors including aluminum, automobiles, pharmaceuticals, semiconductors, and lumber[1][2].
In addition, as of July 31, Trump signed executive orders to impose a 50 percent tariff on certain semi-finished copper products and derivatives starting August 1, although refined copper imports are exempted. This move is seen as a further economic pressure amid stalled negotiations[1][2][4].
Canadian officials, including Trade Minister Dominic LeBlanc, remain in Washington pursuing an optimal deal, emphasizing that Canada is not rushing to accept any agreement regardless of cost. The talks involve broad topics beyond tariffs, including defense, security, and investment cooperation[1][2].
Economic Indicators
In the realm of economic indicators, Canada's Gross Domestic Product met expectations, shrinking 0.1% in May on a monthly basis. It is likely that Canada will regain the lost output in June[3].
On the positive side, Canadian technology stocks rose 1.4% on Thursday, tracking gains in U.S. peers. The index is on track to log its third consecutive monthly gain[3].
Material miners stocks also saw a boost, rising by 1.4% due to higher gold prices[3].
However, some Canadian companies faced challenges. Bombardier slipped 5.2% due to a slight drop in second-quarter revenue, while Canada Goose posted a bigger-than-expected quarterly loss, causing a 2.9% decline[3].
In the U.S., Meta Platforms and Microsoft surged in the U.S. following reported blowout quarterly results on Wednesday[3].
Inflation in the U.S. rose in June due to import tariffs[3].
Stock Market Performance
Despite the pressure caused by the ongoing trade negotiations, the Toronto Stock Exchange's S&P/TSX composite index rose by 0.4% on Thursday, reaching 27,472.63 points[3]. Healthcare stocks experienced the most significant decline, down 3.9%, while the overall market witnessed a 11% fall, causing pressure on healthcare stocks[3].
In the U.S., the performance of the stock market was more positive, with the S&P 500 and the Dow Jones Industrial Average both recording gains[3].
In conclusion, the trade negotiations remain unresolved as of the August 1 deadline, with tariffs increasing on specific products and negotiations continuing without an immediate breakthrough[1][2][3][4]. Meanwhile, the Toronto Stock Exchange and various economic indicators have shown a mix of positive and negative trends.
- Technological stocks in Canada have shown resilience, rising by 1.4% on Thursday, suggesting an ongoing interest in technology-based investments despite uncertain trade conditions.
- The ongoing trade negotiations between Canada and the United States, particularly the threat of tariffs on certain goods, have led to fluctuations in the stock market, causing some companies like Bombardier to experience a decline.
- Inflation in the United States has been influenced by import tariffs, while the Toronto Stock Exchange's index, despite pressure caused by trade negotiations, has shown positive trends, particularly in the technology and materials sectors due to rising gold prices.
