Canadian Market Declines Amid Pullback Mining Stocks, Tariff Concerns

(RTTNews) - Canadian stocks moved to the downside on Thursday due to a sharp pullback gold prices, which weighed on mining stocks, as well as a "lack of positivity" among investors as the meeting between the leaders of Canada and the U.S. this week did not result in any breakthrough on tariffs.

After opening just above yesterday's close, the benchmark S&P/TSX Composite Index turned lower and traded negative throughout the session before finally closing at 30.269.98, down by 232.01 points (or 0.76%).

Four of the 11 sectors posted gains today with Communications Services sector leading the pack.

Gold prices fell sharply today, snapping a four-session winning streak, as investors resorted to profit taking from recent highs. Front Month Comex Gold for October delivery slumped to $3,946.30 per troy ounce. As a result, mining stocks in the materials sector saw a marked decline, pulling the index down.

Since August 1, when the U.S. tariffs of 35% on Canadian exports to the U.S. came into effect, the Canadian economy has been slowing down. In particular, the automobile, aluminum, and steel sectors have been the hardest hit and were forced to shed more jobs.

In addition, 10% tariffs on Canadian softwood lumber (10%) and another 25% on finished wood products (cabinets and upholstered furniture) come into effect on October 14. These duties would rise by 30% for upholstered furniture and by 50% for cabinets and vanity products from January 1, 2026. Of note, more than half of Canadian lumber is shipped to the U.S.

Canadian high-level officials have been engaged in long, intense talks with their U.S. counterparts in an effort to strike a deal on lower tariff rates.

Against this background, the much-awaited meeting between Canadian Prime Minister Mark Carney and U.S. President Donald Trump in Washington took place this week. However, the one-on-one meeting ended without any significant breakthroughs on tariff restructuring, letting down traders.

The only solace appeared to be an announcement from Carney hinting that sector-specific trade deals in steel, aluminum, and energy are on the anvil.

In addition, both leaders have reportedly discussed the revival of the Keystone XL oil pipeline project. It was a planned 1,897-kilometer pipeline to run from Alberta, Canada, to Steele City, Nebraska, where it would join an existing pipe, estimated to carry 830,000 barrels of oil a day.

During the meeting, Trump described the relationship between the U.S. and its neighbor as cordial but defended his protectionist policies. Trump went on to even praise Carney as a "world-class leader" and a "tough negotiator."

In Canada, while delivering a speech in Halifax, senior deputy governor of Bank of Canada Carolyn Rogers called for more players and increased competitiveness in the banking sector. Currently, the Canadian banking industry is dominated by just a few main players with Big Six Banks that hold supremacy and hence alienate themselves from any major risks.

In the U.S., the minutes of the September meeting of the U.S. Federal Reserve released yesterday revealed that most members of the interest-rate setting committee had supported further reductions as they were concerned that unemployment would rise.

Mirroring the U.S., traders in Canada are expecting a rate cut by the central bank of Canada in its October meeting this month-end. Investors are also focused on the developments in the U.S. amid ongoing government shutdown, which has entered its ninth day today.

Major sectors that gained in today's trading were Communication Services (1.23%), IT (0.79%), Healthcare (0.18%), and Consumer Staples (0.12%).

Among the individual stocks, Rogers Communications (2.34%), BCE Inc (1.36%), Bitfarms Ltd (5.20%), Celestica Inc Sv (2.46%), and Open Text Corp (2.32%) were the prominent gainers.

Major sectors that lost in today's trading were Utilities (0.39%), Industrials (1.09%), Consumer Discretionary (1.22%), and Materials (2.84%).

Among the individual stocks, Endeavour Silver Corp (7.80%), Osisko Gold Royalties Ltd (7.21%), Aya Gold and Silver Inc (7.14%), Wesdome Gold Mines Ltd (6.59%), and Magna International (3.10%) were the notable losers.

Energy Fuels Inc (9.75%), Richelieu Hardware Ltd (4.51%), and Cenovus Energy Inc (2.63%) were among the prime market-moving stocks today.