The Canadian stock market faced a significant setback on Friday, marking its largest decline in nearly three weeks. The S&P/TSX composite index ended the day at 24,759.15, down 401.91 points or 1.6%, the lowest close since March 18. This downturn reflects growing apprehension over a potential global economic slowdown fueled by recent U.S. data and escalating trade tensions.

Economic Concerns Weigh on Markets

The latest economic indicators from the United States have raised alarms among investors. In February, U.S. consumer spending showed a less-than-expected rebound, while a key inflation measure surged, raising fears of stagnant growth coupled with rising prices. These concerns were echoed by Matt Skipp, president of SW8 Asset Management, who remarked, “When the U.S. president attempts to restrict the global economy, it creates uncertainty for stock markets. How can business leaders make informed decisions when government policies shift daily?”

Trade Tensions and Market Reactions

Adding to market unease, Canadian GDP figures indicated a modest 0.4% increase in January, with early estimates for February suggesting stagnation. Following a discussion between Prime Minister Mark Carney and U.S. President Donald Trump, it was confirmed that Canada would proceed with retaliatory tariffs next week. Trump’s announcement of a 25% tax on imported vehicles raises concerns for Canada, as automobiles are its second-largest export.

Sector Performance Highlights

The technology sector experienced the steepest decline, falling 3% overall. Notably, Shopify Inc saw its shares drop by 5.7%. The materials sector, which encompasses metal mining, also struggled, declining by 1.7%, significantly impacted by a 15.8% plunge in Aya Gold & Silver Inc following disappointing quarterly results.

• Consumer discretionary stocks fell 2.2%, with auto parts suppliers seeing further decreases and Restaurant Brands International shares declining by 6.1%.
• The industrial sector dropped 2.2%, primarily due to falling railroad stocks, while the heavily weighted financial sector ended the day down 1.6%.

Conclusion

The S&P/TSX composite index’s decline serves as a stark reminder of the fragile state of global markets amid rising trade tensions and uncertain economic indicators. Investors should remain vigilant as these factors continue to evolve, potentially influencing decisions in the coming weeks.