TSX and Wall Street Plunge as U.S. Tariffs Spark Trade War
It’s been a rough ride for the stock markets today, as both Canada and the U.S. are reeling from the impact of a newly launched trade war. The TSX and major U.S. indexes are deep in the red for a second consecutive day after President Donald Trump imposed sweeping tariffs on Canadian and Mexican imports. Investors are rattled, and the sell-off is hitting markets hard across the globe.
The S&P/TSX composite index took a major hit, dropping 547 points to settle at 24,454. Meanwhile, in the U.S., the Dow Jones plunged 703 points, with the S&P 500 and Nasdaq following suit. It’s not just North America feeling the pain—European and Asian markets are also in turmoil, reacting to the escalating tensions.
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Colin Cieszynski, a chief market strategist, summed up the sentiment well: “Markets are getting crushed today.” He noted that this downturn isn’t isolated to Canada or the U.S.—global markets are feeling the pressure as fears of economic slowdown take hold.
At the heart of this chaos are the tariffs themselves. Trump’s latest move enacts a 25% tariff on Canadian and Mexican goods, alongside a 10% levy on energy imports. For weeks, there was hope that Canada might negotiate an exemption, but those hopes were dashed when Trump refused to back down. In response, Prime Minister Justin Trudeau made it clear that Canada won’t take this lightly, announcing retaliatory tariffs of 25% on a range of U.S. products, from food and alcohol to furniture and cosmetics.
So, what does this mean for investors? Right now, there’s uncertainty everywhere. Tariffs disrupt supply chains, drive up costs, and inject uncertainty into the economy. Investors hate uncertainty, which is why we’re seeing such a sharp market reaction. The Canadian dollar has also taken a hit, trading lower at 68.90 cents US. Meanwhile, oil prices are slipping, with crude trading at $67.88 per barrel.
Cieszynski believes this is just the beginning, not the end, of the turmoil. While markets may stabilize in the coming days, the bigger question remains—how much damage will this trade war inflict on the broader economy? With inflation concerns rising and economic growth at risk, all eyes are now on what comes next. Will the U.S. escalate further? How will Canada and Mexico respond? And, most importantly, how long will this last?
For now, one thing is clear: the markets are in for a bumpy ride.
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