TSX Stumbles as Trade War Fears Overshadow Carney's Victory

The Toronto Stock Exchange (TSX) finds itself in a holding pattern, stuck between the political clarity of Mark Carney’s Liberal victory and the looming threat of U.S. trade wars. While markets welcomed the election’s resolution, investor nerves remain frayed by tariff-driven uncertainty. Let’s dig into what’s moving the needle—and where to look for opportunity.

The Trade War Trumps Politics

Carney’s win was supposed to bring stability, but the TSX is ignoring the political theater. The S&P/TSX Composite Index dipped 0.02% to 24,796.55, as traders refocus on the real villain: U.S. President Trump’s trade policies. Analysts at BlueShore Financial note that while markets like the clarity of a new government, fears of a deepening trade war—particularly tariffs on Canadian goods—are keeping investors on edge.

Sector Shenanigans: Winners and Losers

The trade war isn’t affecting all sectors equally. Let’s break it down:

1. Energy Slumps: Oil prices hit two-week lows, dragging energy stocks down 0.8%. . With global demand clouds and U.S. inflation fears, this sector is a rollercoaster.
2. Metals in a Rut: Metal miners fell 0.3% as gold’s safe-haven glow dims. . Reduced trade tensions with China mean investors are shifting away from metals.
3. Tech and Telecom Shine: BCE Inc. jumped 1.5%, leading the communication services rally. . Defensive stocks are proving resilient.

The Auto Sector’s Silver Lining (Maybe)

Canadian auto parts suppliers saw a flicker of hope as whispers of a U.S. tariff pause on autos sparked a rally. Magna International (MG) and Linamar Corp. (LNR) could breathe easier if Trump follows through—though past promises make me skeptical. This is a “buy the rumor, sell the news” scenario.

The Cannabis Card: A Growth Wildcard

The real surprise? Organigram (OGI) is lobbying the new government to make cannabis a trade weapon. The company wants to eliminate interprovincial barriers and create a national export strategy. . With cannabis contributing $43B to GDP and 80,000 jobs, this sector could be a bright spot—if Carney’s government plays ball.

The Elephant in the Room: U.S. Policy Chaos

The U.S. trade war isn’t just a Canadian problem—it’s a global crisis. Yale’s Budget Lab warns that U.S. tariffs could slash GDP growth by 0.9% and push inflation to 2.3%. . With the Fed cornered on rate cuts and the VIX spiking to 50, volatility isn’t going anywhere.

Bottom Line: Navigate with Caution

The TSX is stuck in a trade war vise. Investors should:
- Avoid Energy and Metals: Stick to high-yield defensive stocks like BCE or Telus (TU).
- Watch Auto Tariffs: A U.S. reprieve could spark a rebound, but don’t bet the farm.
- Look to Cannabis: If Organigram’s reforms pass, this sector could be a 2025 breakout.

The data screams caution: 80% of TSX volatility in April 2025 was tied to trade fears. Until Trump’s tariff tantrums subside, this market is a wait-and-see game. Play it smart, and keep your powder dry.

Final Takeaway: The TSX isn’t broken—just distracted. With 80,000 jobs riding on cannabis reforms and $43B in GDP at stake, Canada’s future hinges on Carney’s trade moves. For now, stay defensive, avoid tariff-heavy sectors, and keep an eye on the U.S. tariff horizon. The next move is all Trump’s.

Data as of April 2025. Past performance does not guarantee future results.