Key Points The TSX dropped 391 points to 36,123 on Tuesday amid geopolitical tensions, lower commodity prices, and fresh Canada-U.S. trade tariffs affecting trade-sensitive stocks. Despite sharp declines in technology stocks, Ivanhoe Mines surged 13% on a major copper discovery expansion, and Tamarack Valley Energy gained on a $10 billion merger with Headwater Exploration. Rising crude oil, gold, and silver prices could boost energy and metals stocks at the open today, while trade tensions and new U.S. tariffs on Canadian goods may pressure the market further.
Canadian equities started the new week with a steep decline as investors reacted to renewed geopolitical tensions, mixed commodity prices, and persistent uncertainty around the Canada-U.S. trade outlook. The S&P/TSX Composite Index plunged by 391 points, or 1.1%, on Tuesday to settle at 36,123, erasing all its month-to-date gains. Canada-U.S. trade tensions remained in focus Tuesday after tariffs of 15% to 50% on $27.8 billion worth of U.S. goods took effect.
Prime Minister Mark Carney warned that reducing Canada’s reliance on the U.S. would come at a cost, keeping trade-sensitive stocks in focus. On the one hand, surging base metals and crude oil prices supported commodity-linked sectors, while utility stocks also saw renewed buying interest amid increased demand for defensive investments. On the other hand, weakness across technology, consumer cyclical, and financial stocks weighed on the TSX benchmark.
Top TSX Composite movers and active stocks Shopify, Thomson Reuters, BRP, Kinaxis, and Constellation Software were the worst-performing TSX stocks for the day, as they dived by at least 5.6% each. Despite the broader market selloff, shares of Ivanhoe Mines (TSX: IVN) rallied by nearly 13% after the company announced a major expansion of its Western Forelands copper discovery in the Democratic Republic of the Congo. Ivanhoe Mines reported a 30% increase in copper reserves to about 12 million tonnes.
Tamarack Valley Energy (TSX: TVE) trended higher after announcing a $10 billion strategic combination with Headwater Exploration, creating a larger oil producer with run-rate production of over 80,000 barrels of oil equivalent per day. West Texas Intermediate (WTI) crude oil futures jumped past US$95 per barrel early Wednesday, while gold and silver prices also trended higher. U.S.-Iran geopolitical tensions contributed to commodity volatility.
New U.S. tariffs on Canadian goods could add volatility to trade-sensitive stocks. Montréal-based Transcontinental will announce its latest quarterly results after market closing.
Source: The Motley Fool Canada
