Investment update

Weekly insight into the marketplace.

April 7 to 11, 2025

Stock markets experienced historic swings

North American equity markets remained extremely volatile throughout the week, as global trade and recession concerns dominated headlines. On Monday, Canada’s TSX dropped to a seven-month low, led by losses in the energy and financial sectors. On Wall Street, the benchmark indexes plunged before suddenly surging upwards over reports that the Trump administration might pause tariffs against its trading partners. The White House quickly denied the news, though, and U.S. President Donald Trump went on to threaten additional tariffs against China. The Dow and S&P 500 closed with losses of 0.9% and 0.2% respectively, while the Nasdaq managed to gain 0.1% on the day. Losses mounted on Tuesday, with a late-day slide reversing earlier gains for the U.S. indexes. The Nasdaq led the downturn, closing 2.2% lower after being up over 4% in morning trading. Canada’s TSX followed a similar pattern on its way to a 1.5% loss, as the energy sector led broad-based declines fuelled by concerns of an escalation in trade tensions between China and the U.S. The wild ride continued Wednesday, with global stock markets whipsawing from morning lows after the Trump administration announced a surprise pause on “reciprocal” tariffs against many trading partners. This relieved some of the concerns that had been weighing on investors for weeks, and sparked stock market rallies around the world. The TSX closed 5.4% higher. The Dow gained 7.87% – its best day since March 2020. The S&P 500 turned in its best session since 2008, rocketing up 9.52%. The Nasdaq soared 12.16%, marking its second-best day ever and largest gain since January 2001. But the good fortune was short-lived. Thursday saw stock markets swing back into negative territory. U.S. indexes gave back some of the previous session’s gains: The Nasdaq retreated 4.3%, the S&P 500 fell 3.5% and the Dow lost 2.5%. The TSX closed 3% lower, led by losses from the energy sector, as oil prices fell below US$60 a barrel. On Friday, stock markets bounced back, and all of the benchmarks closed the week firmly in positive territory. The TSX gained 2.6% as prices for oil and metals gained. The Nasdaq led the U.S. indexes with a 2.1% advance, while the S&P 500 and Dow closed 1.8% and 1.6% higher, respectively.

U.S. tariff escalations and pauses triggered global shockwaves

On Wednesday, seven days after launching significant “Liberation Day” reciprocal tariffs against trading partners around the world, President Trump announced a 90-day pause for countries that had not retaliated and were ready to negotiate trade agreements with the U.S. A universal 10% import fee will remain in place in the meantime. The move surprised investors and sparked global stock market rallies, as relief spread that the President was backing off some of his most extreme trade measures. The most notable exception to the pause was the world’s second-largest economy, China. President Trump said Chinese goods would now be subject to tariffs of 125% (up from the previously announced 104%) in response to retaliatory tariffs announced by China earlier in the day. “Based on the lack of respect that China has shown to the world’s markets, I am hereby raising the tariff charged to China by the United States of America to 125%, effective immediately,” Trump said on social media. “At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other countries, is no longer sustainable or acceptable.” Canada and Mexico remain subject to 25% tariffs on goods not covered by the Canada-U.S.-Mexico trade agreement, and other sector-specific tariffs. Speaking from the campaign trail on Thursday, Canadian Prime Minister Mark Carney referred to the pause as “a reprieve for the global economy.” He also pointed out that reciprocal tariffs never applied to Canada, which he noted as “progress,” and reiterated that if he wins the federal election on April 28, he will work with the U.S. administration to negotiate a comprehensive new economic and security agreement. Conservative opposition leader Pierre Poilievre, speaking to supporters at his own event, responded to the Prime Minister: “What progress? There are more American tariffs on Canada today than there were when Prime Minister Carney took office, while dozens of other countries have secured pauses.” Poilievre said he will work to “end the tariffs on day 1 after the next election” and has suggested he would pause retaliatory tariffs on the U.S. as part of a strategy to get a new trade deal with the U.S. (on the condition that the U.S. pauses its tariffs as well).

Cooler-than-expected U.S. inflation data did little to boost sentiment

According to data released by the Department of Labor on Thursday, U.S. consumer prices rose by the lowest amount since September, rising just 2.4% annually in March, down from 2.8% in February. On a monthly basis, prices fell 0.1% in March, the first monthly decline in nearly five years. Core inflation, which excludes volatile energy and food prices, rose 2.8% year-over-year, down from 3.1% last month – the smallest rise in core prices recorded in nearly four years. The data suggests that inflation has been cooling, but many economists believe President Trump’s significant tariffs on China, along with 10% universal duties and import taxes, are likely to push prices higher and weigh on economic growth in the coming months.