Stock markets in Canada and U.S. soar after Trump pauses some tariffs

The Bay Street Financial District is shown with the Canadian flag in Toronto on Friday, Aug. 5, 2022. THE CANADIAN PRESS/Nathan Denette

TORONTO — Stock markets in Canada and the U.S. shot up after U.S. President Donald Trump paused his “reciprocal” tariffs on most nations for 90 days, though he further raised his tax rate on Chinese imports.

In a social media post Wednesday, Trump announced a pause on the “reciprocal tariffs” he enacted on a wide swath of countries. However, the 10 per cent baseline tariff remains in place.

China was the exception to the rule. Trump hiked the tariff rate on goods coming from China to 125 per cent, effective immediately.

“It’ll be interesting to see what happens going forward, because I think this doesn’t really reduce the uncertainty,” said Kevin Headland, chief investment strategist at Manulife Investment Management.

“I think it delays (it).”

The S&P/TSX composite index closed up 1,220.13 points, or 5.4 per cent, at 23,727.03. The index had been down earlier in the morning amid worries about Trump’s trade war and whether it would cause a recession.

In New York, the Dow Jones industrial average was up 2,962.86 points, or 7.9 per cent, at 40,608.45. The S&P 500 index was up 474.13 points, or 9.5 per cent, at 5,456.90 -- its third-best day since World II.

The Nasdaq composite was up 1,857.06 points, or 12.2 per cent, at 17,124.97.

Markets had fallen significantly over the previous four trading days after Trump last week announced the sweeping global tariffs. In recent days, the trade war between China and the U.S. ramped up, with Wednesday’s announcement the latest salvo.

“Clearly, the pendulum is swinging widely on a daily basis,” said Headland.

Prolonged trade uncertainty will likely feed into hard economic data and corporate earnings, he said, though he added so far “we don’t see that right now.”

“That’s what the market’s worried about, is that kind of contagion impact to the actual fundamentals of not only the economy, but also corporate earnings.”

U.S. earnings kick off this week with the major banks reporting. Some companies, including Delta Air Lines on Wednesday, declined to provide forward guidance amid the uncertain times.

“I think it makes sense. I think it’s kind of very responsible of companies to do that,” Headland said.

The Canadian dollar traded for 70.67 cents US compared with 70.44 cents US on Tuesday.

The May crude oil contract was up US$2.77 at US$62.35 per barrel and the May natural gas contract was up 35 cents US at US$3.82 per mmBTU.

The June gold contract was up US$89.20 at US$3,079.40 an ounce and the May copper contract was up five cents US at US$4.19 a pound.

-- With files from The Associated Press

This report by The Canadian Press was first published April 9, 2025.