TSX gains amid earnings parade and focus on tariff outlook

Investing.com - Canada’s main stock exchange settled higher on Tuesday, as investors parse through a string of corporate earnings and assess the outlook for sweeping U.S. tariffs.

By 4.05 ET, the S&P/TSX 60 index standard futures contract gained 3 point, or 0.18%.

Toronto Stock Exchange’s S&P/TSX composite index rose by 47 points, or 0.17% at 27,364.43.

A bevy of quarterly results are due to be released this week, highlighted by figures from Google-owner Alphabet (NASDAQ:GOOGL) and electric carmaker Tesla (NASDAQ:TSLA) on Wednesday.

U.S. stocks mixed 

U.S. stock index traded in a mixed fashion Tuesday, steadying near record levels ahead of a deluge of earnings from some of the country’s biggest companies.

The Dow Jones Industrial Average rose 179 points, and the S&P 500 index gained 4 points, or 0.06%, while the NASDAQ Composite slipped 81 points, or 0.4%.

The benchmark S&P 500 and tech-heavy Nasdaq Composite indices both touched record levels in the prior session, partly fueled by optimism around recent company results.

Pace of earnings picks up this week

The pace of the quarterly earnings season picks up in the coming days, with over 85% of S&P 500 companies set to report returns this week.

Roughly 12% of the S&P 500 has reported during the relatively young earnings season. Of those, 86% have beat their per-share earnings expectations and 67% have delivered higher-than-anticipated sales.

General Motors Co (NYSE:GM). reported second-quarter earnings that beat analyst expectations, but shares fell 4.1% in premarket trading as profit declined significantly from last year due to weaker performance in the auto manufacturer’s crucial North American market.

Homebuilder D.R. Horton reported fiscal third-quarter earnings that surpassed analyst expectations, with adjusted earnings per share of $3.36 exceeding estimates by $0.46 and revenue of $9.23 billion outpacing the $8.8 billion consensus.

Chipmaker Texas Instruments (NASDAQ:TXN) and medical devices company Intuitive Surgical (NASDAQ:ISRG) will post returns after the markets close.

Trump tariffs, interest rate caution persists

While the Wall Street indices did hit a series of record highs over the past week, the pace of gains was seen slowing in recent sessions, amid persistent caution over Trump’s tariffs and uncertainty over the future path of interest rates.

Trump has outlined tariff rates ranging from 20% to 50% against major U.S. trading partners, all of which are set to take effect from August 1. The president also imposed a 50% duty on copper imports, and threatened a 200% duty on pharmaceuticals.

This left markets on edge over the inflationary impact of Trump’s tariffs, especially given that the Fed has cited the tariffs as its main motivation behind keeping interest rates unchanged in the near-term.

The Fed is set to meet next week and is widely expected to leave rates unchanged once more, even amid persistent criticism from Trump and his allies.

Jerome Powell is set to speak at a Fed conference in Washington D.C. later Tuesday, although it remains unclear whether the Fed chair will comment on monetary policy, given that the address comes during the Fed’s blackout period before its end-July meeting.

Crude slips on trade concerns

Oil prices fell on fears the increasingly likely trade war between the European Union and the U.S., two major consumers, will hit economic activity, and thus crude demand.

At 12.05 ET, Brent futures dropped 1.53% to $68.15 a barrel, and U.S. West Texas Intermediate crude futures fell 1.61% to $64.89 a barrel. Both settled slightly lower on Monday.

Gold edges down from one-month high

Gold prices gained strength amid uncertainty over U.S. interest rates and the independence of the Federal Reserve also boosted haven demand. The Fed is widely expected to keep rates unchanged at meeting next week, despite growing calls from Trump that he cut borrowing costs immediately.  

The yellow metal’s safe haven appeal was recently boosted by reports that the European Union was preparing new countermeasures against the U.S. over Trump’s reciprocal tariffs. Washington seen seeking at least 15% tariffs on the bloc, but Brussels is looking to keep the rate at its current level of 10%, reports said.

Spot gold gained 1% to $3,429.91 an ounce, while gold futures up 1.1% to $3,444.25/oz by 12.05 ET.

Spot prices surged 1.4% to nearly $3,400/oz on Monday.