What’s going on here?

Canadian stocks surged as Donald Trump made a surprising return to the White House, nudging the S&P/TSX index close to a record high with technology stocks shining.

What does this mean?

Trump’s reelection has been warmly received by Canadian markets, with expectations of tax cuts and deregulation seen as catalysts for economic growth. The S&P/TSX composite index rose by 107.4 points, nearing its all-time high, led by a strong tech sector boost. Bitfarms jumped 10.5% thanks to bitcoin surpassing $82,000. Financials and utilities gained 1.1% each, lifted by investor optimism. However, materials declined by 3.2% due to falling gold prices, driven by a stronger US dollar and increased risk appetite. There’s also apprehension about Trump’s proposed 10% import tariff that could disrupt Canada’s exports, of which 75% head to the US.

Why should I care?

For markets: Tech takes the lead while tariffs cast a shadow.

Investors are excited about the tech sector’s performance, with firms like Bitfarms capitalizing on cryptocurrency spikes. However, concerns linger over potential US tariffs that could significantly affect Canadian exports, including critical oil shipments. As the tech sector rallies, Canadians are alert to US policy shifts that might impact this uptrend.

The bigger picture: Balancing growth with trade tensions.

Trump’s return presents global markets with mixed signals: prospects for economic growth are clouded by trade uncertainty. Tariff threats pose risks to Canadian industries, affecting global supply chains and economic strategies. Meanwhile, global attention is fixed on the US consumer price index for hints about the Federal Reserve’s future actions, as these could have widespread effects on world markets.