TSX Futures Rise as U.S. Tech Tariff Pause Boosts Global Market Sentiment
Canadian stock futures edged higher on Monday, extending last week’s rebound, as investors welcomed a temporary reprieve in U.S. trade tariffs targeting electronics. The tech tariff pause, combined with a rise in commodity prices and expectations of monetary easing, sent a wave of cautious optimism across global markets, including Canada.
As of 06:48 ET (10:48 GMT), futures linked to the S&P/TSX 60 index gained 7 points, or 0.5%, following a strong close last week where the benchmark S&P/TSX Composite Index jumped 572.93 points, or 2.5%. That rally helped the TSX notch a weekly gain, recovering from volatile sessions that saw the index dip to its lowest in nearly eight months.
Relief from Tariffs Sparks Optimism
Market sentiment improved after U.S. President Donald Trump announced over the weekend that smartphones, computers, and other electronics would be temporarily excluded from his administration’s steep reciprocal tariffs on Chinese imports.
The pause eases pressure on tech giants like Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA), both of which rely heavily on Chinese manufacturing. However, Trump reiterated that the relief is temporary and hinted at new tariffs on imported semiconductors, which could reignite trade tensions in the near term.
While uncertainties persist, the short-term reprieve gave global markets—including the TSX—a much-needed boost.
Commodity Surge Supports Canadian Equities
Copper and Gold Prices Climb
Canada’s resource-heavy market benefited significantly from a rally in key commodities. Copper prices stabilized above $9,150/ton, offering a lifeline to Canadian base metal miners. Meanwhile, gold prices remained elevated, trading above $3,200 per ounce, despite dipping slightly from last week’s record high of $3,245.69/oz.
Gold’s pullback was largely attributed to improved risk sentiment and a slight uptick in equity markets, but broader recession fears and a weaker U.S. dollar continue to offer long-term support for bullion.
Spot gold was last seen at $3,214.52/oz, down 0.7%, while June gold futures dipped 0.5% to $3,229.60/oz.
Oil Prices Recover
Crude oil also rebounded modestly after steep losses in early April. Fears of a slowdown in global demand, exacerbated by the U.S.-China tariff standoff, had dragged oil prices down by nearly $10 per barrel this month.
However, early Monday saw a bounce:
- Brent crude rose 1.0% to $65.40/barrel
- WTI crude gained 1.1% to $62.15/barrel
The uptick in oil prices contributed to a rally in Canadian energy stocks, one of the TSX’s largest sectors.
Canadian Dollar Holds Steady Ahead of BoC Decision
The Canadian dollar (CAD) remained steady against the U.S. dollar, trading near its strongest level since November. Analysts believe the Bank of Canada (BoC) will adopt a dovish stance in its upcoming policy meeting, with expectations of a rate cut to counter economic headwinds and support growth.
Higher commodity prices and stable domestic data are helping cushion the loonie despite global volatility.
Wall Street Rally Extends to TSX
U.S. stock futures rallied strongly in early Monday trade:
- Dow Jones Futures up 362 points (0.9%)
- S&P 500 Futures rose 69 points (1.3%)
- Nasdaq 100 Futures jumped 282 points (1.5%)
These gains mirrored optimism from Friday’s Wall Street session, which ended the week on a high note after days of wild swings triggered by tariff threats and mixed earnings.
Corporate Earnings in Focus
This week marks another crucial earnings cycle for North American markets. Leading the slate is Goldman Sachs (NYSE:GS), expected to report Q1 revenue of $14.76 billion and EPS of $12.26.
Other major earnings include:
- Bank of America
- Citigroup (NYSE:C)
- Johnson & Johnson (NYSE:JNJ)
- United Airlines (NASDAQ:UAL)
Investors are watching closely for commentary on tariff impacts, supply chain disruptions, and forward guidance.
Broader Market Outlook
While Monday’s market movements suggest optimism, analysts warn that sentiment remains fragile. The global economy faces significant challenges:
- U.S.-China trade friction remains unresolved
- Inflationary pressures continue to linger
- Monetary policy signals from the BoC and the Fed will dictate asset movements
Still, the rebound in TSX futures and commodity prices indicates growing confidence that central banks may intervene if macro risks escalate further.
FAQs
1. Why did TSX futures rise today?
Futures rose due to a temporary U.S. exemption of tech products from tariffs, a rally in commodity prices, and positive global equity sentiment.
2. How do U.S. tariffs affect Canadian stocks?
Canadian firms, especially tech and resource exporters, are indirectly impacted by U.S.-China trade tensions, which affect global supply chains and market sentiment.
3. What is driving gold prices above $3,200?
Safe-haven demand, recession fears, and central bank easing expectations are lifting gold prices despite a short-term dip.
4. How is oil performing amid trade tensions?
Oil prices have rebounded slightly after earlier losses due to fears of lower global demand amid the ongoing trade war.
5. Will the Bank of Canada cut rates this week?
Markets are pricing in a high probability of a BoC rate cut to support growth amid global uncertainty.
6. How do U.S. stock movements affect the TSX?
TSX often mirrors Wall Street due to economic ties and investor sentiment. Gains in the U.S. often drive TSX futures higher.
7. Which sectors are supporting TSX gains?
Energy, mining, and financial sectors led the rally, while real estate lagged due to higher borrowing costs.
8. Is the Canadian dollar at risk?
Not currently. The CAD is holding strong thanks to stable commodities and rate expectations, but risks remain if oil drops further.
Disclaimer
This article is for informational purposes only and does not constitute financial advice. Always conduct your own research or consult with a qualified investment professional before making any financial decisions. The author and publisher are not liable for any financial losses or damages incurred based on the content herein.
