Canadian stocks are poised for a downturn on Tuesday, driven by declining commodity prices and apprehensions surrounding U.S. President Donald Trump's proposal to impose a 25% tariff on goods imported from Canada, effective February 1. Additionally, inflation data is anticipated to have a notable influence on market movements.
On the inaugural day of his second term, Trump announced his intention to implement a 25% tariff on imports from Mexico and Canada. During a signing ceremony in the Oval Office following his swearing-in on Monday, he declared that the new tariff aims to compel neighboring countries to address illegal immigration and drug-related issues, with its activation set for February 1.
Canadian inflation statistics for December are scheduled for release at 8:30 AM ET. Canada's annual inflation rate fell to 1.9% in November, compared to 2% the previous month. The core inflation rate also decreased, from 1.7% in October to 1.6% in November.
The Canadian market closed higher on Monday, marking its fifth consecutive session of gains, as news emerged that the Trump administration would temporarily delay the imposition of trade tariffs.
The S&P/TSX Composite Index rose to 25,245.78, ultimately closing with an increase of 103.66 points or 0.41% at 25,171.58.
Asian markets concluded variedly on Tuesday, reacting to Trump's tariff announcement on imports from Canada and Mexico, along with the potential impact on China pending negotiations over TikTok's ownership.
European markets are exhibiting mixed performances as investors evaluate the implications of Trump's policies on international trade and economic growth.
In the commodities sector, West Texas Intermediate Crude is down $1.91 or 2.45%, priced at $75.97 per barrel. Gold futures decreased by $12.00 or 0.42%, standing at $2,736.70 an ounce, and Silver futures are slightly lower at $31.110 an ounce.
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