Canadian Stocks Dip As Investors Assess Tariff Pressure

(RTTNews) - Canadian stocks fell on Tuesday amid uncertainty about US trade policy after US President Donald Trump delayed the reciprocal tariff deadline until August 1.

Minutes after opening higher than yesterday's close, the benchmark S&P/TSX Composite Index hit an intra-day high of 27,070.18.

The index then turned lower, continued to slide and finally settled at 26,903.57, down by 116.71 (or 0.43 %).

Trump on Monday signed an executive order officially extending the suspension of reciprocal tariffs on U.S. trade partners.

The executive order says the 90-day suspension, which was due to expire on Wednesday, has been extended until August 1st based on "additional information and recommendations from various senior officials."

Trump told reporters on Monday that the new tariff deadline is "not 100 percent firm" but said in a Truth Social post this morning that "No extensions will be granted," adding to the uncertainty.

With the UK, China, and Vietnam having made deals with the US, India purportedly is nearing one.

PM Mark Carney stated last month that Canada and the US are negotiating to close a deal by July 21. Keeping investors on the hook, the government has not divulged any further details.

In the absence of a good trade deal, Trump's tariffs could send Canada into a recession.

Continuing his hardline stance, yesterday Trump announced that his government is sending letters to multiple countries (around 170) informing them on the higher levies.

Letters were not sent to Canada, India and the EU though.

Trump revealed the levies (ranging from 25% to 40%) on 14 countries, including major trading partners, Japan and South Korea. He further stated that the tariffs would reduce if these countries revise their trading policies with the US.

These levies are set to take effect from August 1, thereby giving these countries around three weeks' time to come up with a plan.

On the data front, the Ivey Purchasing Managers Index which measures the month-to-month variation in economic activity revealed an increase from 48.9 in May to 53.3 in June, above market expectations of 49.1. This indicates economic expansion even though hiring showed a slight contraction.

Carney is working to wean off Canada's economic dependence on the US where it sends 75% of its exports.

Canadian CEOs are officially visiting India for bilateral trade agreements later this year. Canada shipped its first LNG export to South Korea after sending its first Natural Gas shipment from British Columbia to Asia last week.

On a related note, the government is preparing for the first federal budget under PM Mark Carney, to be tabled this fall.

Under the PM's orders, Canadian finance minister has asked cabinet members to find billion-dollar savings measures to initiate budgetary spending cuts.

The country's military expenditure has risen to 5% of GDP following Canada's commitment at last month's NATO summit.

Major sectors that gained in today's trading were Energy (2.14%), Communication Services (1.57%), Consumer Discretionary (0.60%), and Industrials (0.58%).

Among the individual stocks, Baytex Energy (9.72%), Vermillion Energy (4.86%), Cenovus Energy (4.06%), and BCE Inc (2.73%) were the prominent gainers.

Major sectors that lost in today's trading were Real Estate (0.13%), Utilities (0.19%), IT (0.91%), and Materials (3.48%).

Among the individual stocks, SSR Mining (8.70%), Iamgold Corp (7.81%), Dye & Durham Ltd (6.75%), and Shopify (3.35%) were the notable losers.