Stocks surge on U.S.-China trade truce, while gold plummets

Financial numbers flow on the digital ticker tape at the TMX Group in Toronto's financial district on May 9, 2014. THE CANADIAN PRESS/Darren Calabrese

News of a 90-day truce in the U.S.-China trade war propelled markets higher on Monday, with the surge more pronounced south of the border than in Canada

The S&P/TSX composite index was up 174.44 points at 25,532.18. Earlier in the day, Canada’s main stock market had raced more than 370 points higher than Friday’s close.

“Toronto’s lagging the big New York move, but that’s the index makeup,” said John Zechner, chairman and lead equity manager at J. Zechner Associates.

“It’s a risk-on day, so Toronto’s got more defensive sectors.”

In New York, the Dow Jones industrial average was up 1,160.72 points at 42,410.10. The S&P 500 index was up 184.28 points at 5,844.19, while the Nasdaq composite was up 779.43 points, or 4.4 per cent, at 18,708.34.

Zechner said going into the weekend, market watchers weren’t expecting much out of the U.S.-China tariff talks — maybe an agreement to keep negotiating.

That the news was more substantial — each of the world’s two largest economies agreeing to remove most tariffs against the other for 90 days — “was something to really set the bulls going,” he said.

To gauge how sustainable the rally is, Zechner said he’ll be looking beyond the day-to-day tariff headlines to upcoming economic data around inflation and employment.

“Our heads are still spinning. We don’t know where this ends up,” he said.

The big winners on Wall Street were big semiconductor and tech stocks, as well as apparel and travel names that had been hardest-hit in the China-U. S. tariff tit-for-tat.

Tech, energy and base metal stocks led the gains on Bay Street.

But many miners of gold, a precious metal investors often flock to as a safe haven, were walloped on the TSX as the June contract lost US$116 to settle at $3,228 an ounce.

Among those seeing drops were Lundin Gold Inc. down 18 per cent, Iamgold Corp. down 10 per cent and Allied Gold Corp. down nine per cent.

The July copper contract was off three US cents at US$4.62 a pound.

The June crude oil contract was up 93 cents U.S. at US$61.95 per barrel and the June natural gas contract was down 15 cents US at US$3.65 per mmBTU.

The Canadian dollar closed at 71.44 cents US compared with 71.80 cents US on Friday.

This report by The Canadian Press was first published May 12, 2025.

Lauren Krugel, The Canadian Press