TSX Falls on Mining and Energy Losses

The S&P/TSX Composite Index fell 0.8% to close at 36,554 on Friday, weighed down by losses in mining and energy stocks. Mining shares declined sharply as gold prices fell following hawkish commentary from Federal Reserve Chair Kevin Warsh, which strengthened expectations for a rate hike next month. Agnico Eagle tumbled 3.8%, Barrick lost 3.1%, WPM retreated 2.6%, and Kinross shed 3.5%. Energy producers also declined as oil prices fell after flows through the Strait of Hormuz increased and Iran and Oman agreed on a revenue-sharing framework for the waterway. Canadian Natural fell 1.3%, Suncor lost 1.1%, and Imperial Oil shed 1%. AI-infrastructure stocks tracked losses in US chipmakers, with Shopify down 0.6% and Celestica tumbling 5.5%. Financials and the broader market held up better, supported by Canada’s GDP growth of 3.3% in Q2, its strongest pace in nearly two years.

The S&P/TSX Composite Index inched higher to trade near 37,000 on Friday following the release of GDP data. Canada's GDP expanded at an annualized rate of 3.3% in the second quarter, the strongest pace in nearly two years, providing some buffer against economic risks from ongoing trade disputes with the US. Canada’s ambassador to Washington, Mark Wiseman, said on Thursday that Ottawa could not accept a trade deal unless it ensured the survival of a robust Canadian auto assembly and parts industry. Earlier this week, US President Trump threatened to raise tariffs on all Canadian cars, trucks, and automotive parts to 50% from January 1st, 2027, following the imposition of tariffs on a range of Canadian goods. Major banks traded higher after a largely positive batch of earnings reports, with RBC, TD Bank, Scotiabank, and CIBC, all of which beat expectations, gaining about 1% each. Tech stocks also extended gains following Nvidia’s strong results, with Shopify up more than 0.5%.

Futures tracking Canadian stocks were little changed on Friday following the release of GDP data. Canada’s GDP expanded at an annualized rate of 3.3% in the second quarter, the strongest pace in nearly two years, adding to some buffer amid economic risks from trade disputes with the US. Canada’s ambassador to Washington, Mark Wiseman, said on Thursday that Ottawa could not accept a trade deal unless it ensured the survival of a robust Canadian auto assembly and parts industry. This week, US President Trump threatened on Monday to raise tariffs on all Canadian cars, trucks, and automotive parts to 50% from January 1st, 2027. The US also imposed 50% tariffs on selected Canadian goods on Saturday, including furniture, plastics, plywood, and electrical equipment, on top of existing duties on steel, lumber, and autos. Canada responded with retaliatory tariffs on about $20 billion of annual US imports. Concerns are that the trade tensions could derail the economic recovery.