TSX finishes mixed as investors digest Trump-Carney meeting

Investing.com - Canada’s main stock exchange rose marginally on Tuesday, as investors looked ahead to a key meeting between Prime Minister Mark Carney and U.S. President Donald Trump where trade is likely to be a major topic.

By the 4:00 ET close, the S&P/TSX 60 index edged down by 2.5 points or 0.2%, having fallen 4.9 points, or 0.3% in Monday’s trading.

The Toronto Stock Exchange’s S&P/TSX composite index finished up 20.5 points or 0.1%, having sunk to begin the trading week, falling by 77.99 points, or 0.3%. Last Friday, it had notched its highest closing level since early April.

Carney and Trump’s press conference was mostly cordial, though Trump continued calls for Canada becoming the 51st state. Carney responded that Canada is "not for sale," to which Trump chided, "Never say never." 

After the private meeting between cabinets, Carney spoke to reporters, calling the talks "constructive" but tempered expectations of any trade deal coming soon. 

Since returning to the White House for a second term in power, Trump has threatened to impose aggressive tariffs on Canada and suggested that the U.S. could annex the country. The actions have fueled a backlash among many Canadians that helped power Carney’s Liberals to a victory in last month’s parliamentary elections.

It was the first in-person between Trump and Carney, a former central banker with no prior political experience. Carney said he welcomed the opportunity to hold "comprehensive" discussions with Trump, adding that he anticipated the talks would be difficult but constructive.

U.S. stocks drop

U.S. stocks retreated Tuesday as investors assessed a fresh batch of corporate earnings ahead of the start of the latest Federal Reserve meeting.

At 11:30 ET, the Dow dropped 390.1 points, or 1%, the S&P slipped 46.7 points, or 0.8%, and the Nasdaq fell 154.6 points, or 0.9%.

The main indices closed lower Monday as tariff uncertainty continues to weigh, with sentiment dented by Trump’s announcement of new 100% tariffs on foreign-made movies.

The benchmark S&P 500 index dropped 0.6% to snap its nine-day rally -- its longest winning streak since 2004. The tech-heavy Nasdaq Composite fell 0.7%, while the Dow Jones Industrial Average slipped 0.2%.

The Fed is scheduled to kick off its two-day meeting later today, with the central bank expected to hold interest rates steady at the conclusion of the gathering on Wednesday.

Fed Chair Jerome Powell recently signaled that policymakers are in a wait-and-see mode amid tariff concerns. This comes despite overt pressure from Trump and Treasury Secretary Scott Bessent to cut policy rates.

Earnings

In earnings Monday night, Palantir Technologies Inc (NASDAQ:PLTR) offered strong results and lifted sales guidance, but shares have continually sunk Tuesday, last down 11.9%, as investor expectations were higher yet. Hims Hers Health Inc (NYSE:HIMS) reported first quarter earnings that fell short of analyst expectations, despite strong revenue growth. However, shares rose 11.8% in Tuesday trading based on strong guidance.

Other Monday and Tuesday fallers included Vertex Pharmaceuticals Inc (NASDAQ:VRTX) and Ford Motor Company (NYSE:F).

In Tuesday morning’s earnings reports, DoorDash Inc (NASDAQ:DASH) reported first-quarter revenue that fell short of estimates, while also confirming it has made a formal offer to acquire U.K. rival Deliveroo Holdings PLC (LON:ROO). Doordash stock has fallen 7.2% since the revenue miss, while Deliveroo has gained nearly 2% on the news.

Crude prices bounce

Oil prices rose Tuesday, bouncing after the previous session’s sharp drop following the decision by a group of major producers to accelerate increases in output, raising oversupply concerns.

At 4:05, Brent futures climbed 3.2% to $62.14 a barrel, and U.S. West Texas Intermediate crude futures advanced by 3.5% to $59.12 per barrel.

Both benchmarks had settled at their lowest since February 2021 on Monday, driven by the decision over the weekend by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to announce much higher production hikes than initially expected.

Saudi Arabia, the world’s largest crude exporter, is set to lead the cartel into unwinding over two years of production cuts, with several OPEC+ members looking to increase sales volumes to offset weaker oil prices.

Gold rallies after new tariffs announced

Gold prices extended sharp gains in trading on Tuesday as bullion’s haven demand rebounded on fresh U.S. tariff announcements, while investors exercised caution ahead of the Federal Reserve’s policy meeting starting later in the day.

As of 4:05 ET, spot gold rose 2.7% to $3,423.77 per ounce, while gold futures expiring in June jumped 3.3% to $3,432.09 an ounce.

The yellow metal jumped nearly 3% on Monday, erasing most of the losses it recorded last week. Gold prices had hit a record high last month, just above $3,500 per ounce.

Trump signed an executive order on Monday aimed at enhancing domestic pharmaceutical manufacturing and warned that import tariffs on the sector could be introduced within two weeks.

These moves come amid ongoing uncertainty around U.S.-China trade tensions. U.S. Treasury Secretary Scott Bessent told CNBC on Monday that he expects to see progress in U.S.-China trade talks in the coming weeks. China said last week that it was evaluating the possibility of trade talks with the U.S.

Hopes of dialogue over trade tensions eased some market fears initially, but the introduction of new tariffs and ongoing uncertainty drove investors towards safe-haven assets like gold. Investors were also treading carefully ahead of the beginning of the Fed’s policy meeting.

(Scott Kanowsky also contributed to this article)