Investing.com - Canada’s main stock index dropped slightly lower at close on Thursday, as investors assessed reactions to U.S. President Donald Trump’s new automotive sector tariffs.
By the 4:00 ET close, the S&P/TSX 60 index had dropped by 0.6 points or 0.04%.
The Toronto Stock Exchange ’s S&P/TSX composite index fluctuated throughout the day, ending up breaking even at 0 points gained or lost. The index closed down by 178.45 points or 0.7% on Wednesday, edging back from an almost one-month high notched at the end of the prior session.
Trump later said he aims to slap the tariffs on global automotive imports into the U.S. starting from April 3, following through on a prior pledge to place a trade tax on overseas car and truck manufacturers.
Speaking at the Oval Office, Trump added that the duties will apply to “all cars not made in the U.S." The statement appeared to exclude possible carve-outs for Canada and Mexico, two countries that play a pivotal role in the process of car construction and have a free-trade agreement with the U.S. that was signed during Trump’s first term in office.
Canadian Prime Minster Mark Carney said the move represented a direct attack on its workers, adding that officials in Ottawa would decide what actions they could take in response, including possible retaliatory countermeasures.
In an address Thursday, Carney confirmed that Trump reached out Wednesday to set up a call, mentioning that he expects to speak within the next few days. He also spoke of discussions between premiers, businesses, and union leaders taking place Friday to develop a coordinated response to the U.S.’ April 2 tariffs.
U.S. stocks slightly lower
U.S. stock indexes traded lower before closing on Thursday, as investors digested the news that the Trump administration will impose tariffs on automobile imports.
By the 4:00 ET close, the Dow Jones Industrial Average fell 155 points, or 0.4%, the S&P 500 dropped 19 points, or 0.03%, and the NASDAQ Composite lowered by 95 points or 0.5%.
The main Wall Street indices recorded a negative session on Wednesday, dragged down in part by technology stocks. Sentiment was hit by a report from analyst at TD Cowen which suggested that software giant Microsoft (NASDAQ: MSFT ) may be dialing down some of its commitments to spending on data center infrastructure.
In trading, shares in U.S. automakers dropped, with markets fretting over the impact of Trump’s tariffs on these companies, given that a bulk of them operate factories outside the U.S., especially in Mexico.
General Motors (NYSE: GM ), Stellantis (NYSE: STLA ) and Ford all traded sharply lower on Thursday, while U.S.-listed foreign automakers Toyota (NYSE: TM ), Honda (NYSE: HMC ) and Ferrari (NYSE: RACE ) also fell.
Oil gains following Trump tariff announcement
Oil prices slightly gained after a one-month high Thursday, when government data confirmed a hefty drop in U.S. crude inventories, signaling healthy demand for fuel in the world’s largest economy.
At 5:10 ET, Brent crude futures gained 0.4% to $73.35 a barrel and U.S. West Texas Intermediate crude rose 0.3% to $69.91 per barrel.
Both benchmarks rose by around 1% Wednesday on government data showing U.S. crude oil inventories fell last week, dropping by 3.3 million barrels, exceeding analysts’ expectations of a 956,000-barrel reduction.
However, Trump’s auto tariff announcement weighed on oil prices, as traders weighed the impact of the measures on global economic activity.
Gold underpinned by safe-haven demand
Gold prices rose in European trade on Thursday, buoyed by renewed safe haven demand after the latest escalation in Trump’s tariff agenda.
Goldman Sachs (NYSE: GS ) also hiked its 2025 gold price target, forecasting solid central bank demand and strong inflows from exchange-traded funds.
Trump’s tariffs sparked a risk-off move across global markets, driving investors towards traditional safe-haven assets like gold.
Spot gold rose 1.25% to $3,056.80 an ounce, hitting a record high of $3,059.58 earlier in the session. Gold futures expiring in May added 1.5% to $3,099.10/oz by 5:10 ET.
(Scott Kanowsky also contributed to this article)