S&P/TSX composite ticks higher, U.S. stock markets fall

Trader Dylan Halvorsan works on the floor of the New York Stock Exchange, Wednesday, April 16, 2025. (AP Photo/Richard Drew)

Strength in the energy sector helped Canada’s main stock index make a small gain Wednesday after the Bank of Canada announced it would keep its key interest rate steady, even as U.S. markets fell.

Semiconductor heavyweight Nvidia dragged on American markets, falling almost seven per cent after it said new U.S. restrictions on exports to China would mean a multi-billion-dollar hit to its earnings.

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Recently, “I think you’re seeing a lot of headlines like that,” said Dustin Reid, vice-president and chief strategist for fixed income at Mackenzie Investments.

“There’s a lot of volatility in markets ... as volatility moves higher, it forces risk managers to cut positions.”

The S&P/TSX composite index closed up 38.89 points at 24,106.79. The index has less exposure to the tech sector, making U.S. indexes more susceptible to downward moves by major tech stocks — the big weight on Wall Street Wednesday.

In New York, the Dow Jones industrial average was down 699.57 points, or 1.7 per cent, at 39,669.39. The S&P 500 index was down 120.93 points, or 2.2 per cent, at 5,275.70, while the Nasdaq composite was down 516.01 points, or 3.1 per cent, at 16,307.16.

U.S. Federal Reserve chairman Jerome Powell spoke Wednesday, saying U.S. President Donald Trump’s tariffs appear bigger than expected. However, he also said the Fed needs more time before deciding whether to lower rates.

Losses in U.S. stocks accelerated after his comments in the afternoon. Powell’s rhetoric on interest rates didn’t change noticeably from his last speech, said Reid, which may have disappointed some investors hoping for talk of easing rates.

Meanwhile, the Bank of Canada held its key interest rate steady Wednesday after a succession of cuts that brought it from five per cent to 2.75 per cent.

Governor Tiff Macklem said the uncertainty stemming from the new U.S. government’s “dramatic protectionist shift” and “chaotic delivery” were the focus of the decision.

“The future is no clearer. We still do not know what tariffs will be imposed, whether they’ll be reduced or escalated, or how long all of this will last,” he said.

Macklem said the central bank decided to hold its rate until it has more information about the path forward for tariffs and the effects they will have.

Tariffs are widely considered inflationary and are expected to weigh on economic growth.

“The bank was a little bit more focused, I think, on the inflation side, and the recent pickup in near-term inflation,” said Reid.

However, he said he still expects one or two more cuts this year from the central bank.

The Canadian dollar traded for 71.99 cents US compared with 71.77 cents US on Tuesday.

The June crude oil contract was up US$1.08 at US$61.83 per barrel and the May natural gas contract was down eight cents US at US$3.25 per mmBTU.

The June gold contract was up US$106 at US$3,346.40 an ounce and the May copper contract was up six cents US at US$4.69 a pound.

This report by The Canadian Press was first published April 16, 2025.