Investing.com - Canada’s main stock index hit a 3-week high on Monday, with investors assessing a reported narrowing in a potential upcoming U.S. tariff announcement and gauging Prime Minister Mark Carney’s move to call a snap election for next month.
By the 4:00 ET close, the S&P TSX 60 index had risen by 21.6 points or 1.44%. The bellweather S&P/TSX Composite index hit a 3-week high, closing up 335.6 points or 1.34%.
Bolstering sentiment was a weekend report from Bloomberg News that Trump could unveil tariffs at an April 2 "Liberation Day" announcement that are more targeted than he has previously threatened. This was confirmed at a press conference before Trump and his cabinet met on Monday.
Trump has said in prior weeks that he would roll out sprawling tariffs on both friends and foes alike in response to perceived trade imbalances. But Trump’s announcement -- while still a significant expansion of his aggressive approach to international trade -- may exclude some nations or blocs, the Bloomberg report said, citing aides and allies to the president.
Tariffs on specific sectors, another possible measure floated by Trump, will also likely not be revealed at the event, the report said.
However, Trump is planning to announce tariff rates that are due to come into effect immediately, likely provoking retaliatory countermeasures from some countries, the report said. Those countries who do not impose tariffs on the U.S. and with whom the U.S. has a trade surplus may be exempted from the reciprocal levies, Bloomberg added.
"Targeted is obviously better than the alternative, but the trade changes being envisioned are still substantial, and it’s likely they will have negative effects on the economy and corporate profits, at least in the near and medium term," analysts at Vital Knowledge said in a note to clients.
Meanwhile, Canadian Prime Minister Mark Carney has called a snap election for April 28, arguing that the country’s leader needs a strong mandate to take on threats from Trump.
Tensions between Canada and its neighbor to the south have risen since Trump’s return to the White House earlier this year. Trump has delayed a broad 25% tariff on Canada, imposed separate levies on steel and aluminum, and threatened reciprocal duties on items like dairy and lumber -- all while suggesting that the U.S. could eventual annex the country as its "51st state."
The actions and comments have stoked retaliatory trade measures from Ottawa and demands that Washington treat its traditional ally with respect. Economists have warned, however, that heavy tariffs could damage a Canadian economy that is heavily reliant on exports to the U.S.
"We believe Canada cannot afford a prolonged trade war with the U.S. due to risk of recession and a potential rekindling of inflation," analysts at Bank of America (NYSE:BAC) said in a note to clients.
Carney became Prime Minister on March 14 after winning a Liberal Party vote to replace former leader Justin Trudeau. Carney, a former central banker, has said he would strive to work with Trump, but on Sunday called Trump tariffs and rhetoric the "most significant crisis of our lifetimes."
U.S. stocks climb
U.S. stocks also advanced on the day, as investor concerns were somewhat soothed by the reports of a narrower-than-expected upcoming tariff announcement from Trump.
By 4:00 ET, the Dow Jones Industrial Average climbed 598 points, or 1.4%, the S&P 500 rose 100 points, or 1.76%, and the NASDAQ Composite gained 404.5 points, or 2.3%.
Worries over the Trump administration’s tariffs have battered Wall Street in recent weeks, with the major indices slumping to six-month lows earlier this month as markets feared that the tariffs will increase inflation, disrupt global trade and dent economic growth.
Crude gains
Oil prices edged higher Monday, helped by fresh U.S. sanctions against Iran, adding to the potential for tighter supplies in the coming months.
As of 5:30 ET, West Texas Intermediate Crude Oil Futures rose 1.3% to $69.16 a barrel. Brent Oil Futures rose 0.1% to $72.49 per barrel.
Both benchmarks settled in the green on Friday and recorded a second consecutive weekly gain, boosted by new U.S. sanctions on Iran and the latest output plan from the OPEC+ producer group, with seven of its member states set to cut output to make up for recent production increases.
Gold falls slightly
Gold prices steadied around the flatline before falling slightly in trading on Monday. Earlier, prices retreated further from record highs, as reports that Trump’s April 2 tariffs will be less severe than feared weighed on haven demand.
On the day, Gold Futures declined 0.1% to $3045.95 per ounce. By 5:00 ET, XAU/USD was down 0.4% to $3012.28.
A softer dollar capped gold’s losses, while broader metal prices advanced marginally.
Gold still remained in sight of recent peaks, as uncertainty over the U.S. economy and Trump’s broader tariff proposals underpinned the flight to the perceived safety of bullion.
Beyond tariffs, focus also remained on ongoing negotiations over a potential ceasefire to the war in Ukraine, as well as heightened tensions in the Middle East.