Investment update

Weekly insight into the marketplace.

April 28 to May 2, 2025

Markets closed with weekly gains

Led by declines in the energy sector, Canada's commodity-heavy TSX closed 0.7% lower on Monday, snapping a five-session win streak. Uranium mining companies were the hardest hit amid tariff concerns and China’s rare earths export restrictions. On Wall Street, the Dow was up 0.28% and the S&P 500 gained 0.06%, while the Nasdaq lost 0.10% as investors looked ahead to a busy week of economic data and quarterly earnings. The U.S. benchmarks swung between gains and losses again on Tuesday but rallied to close in positive territory. The S&P 500 and the Nasdaq rose 0.6% and 0.5%, respectively, and the Dow added 0.8%. Canada’s TSX also bounced back from midday losses to close higher on the day. Market sentiment on Tuesday improved after U.S. President Donald Trump signed an executive order that reduced some of the tariff strain on the auto industry. On Wednesday, after gross domestic product (GDP) data showed the U.S. economy contracted for the first time in three years, the major U.S. indexes suffered heavy losses, down between 2% to 3% in intraday trading before rallying back. The S&P 500 ended the day with a 0.15% gain, the Dow climbed 0.35%, while the Nasdaq shed a moderate 0.09%. Canada’s TSX slipped 0.1%. On Thursday, the Dow and the S&P 500 closed higher for an eighth straight session (up 0.21% and 0.63%, respectively), and the tech-heavy Nasdaq surged 1.52%, as investors responded to positive corporate earnings from tech giants Microsoft and Meta. The U.S. benchmarks surged again on Friday following a strong jobs report, closing the week firmly in positive territory. The TSX also closed higher. For the month of April, the TSX declined 0.3%, the S&P 500 was down 0.76%, the Dow dropped 3.17%, while the Nasdaq added 0.85%.

The Liberals won a fourth mandate

On Monday, Mark Carney, the former leader of two G7 central banks, led the Liberal Party to victory and secured a minority government. The Liberals won in 168 ridings versus the Conservative’s 144, with 43.7% of the popular vote (versus 41.3%). Carney’s election, and a fourth consecutive Liberal mandate, ends one of the more dramatic races in recent Canadian political history, and removes some uncertainty for investors, though many questions remain. Canadians will be looking to Carney, with his reputation as a pragmatic, market-savvy leader, to guide the country through a potentially tumultuous period with President Trump and his trade policies as the most immediate threat. Sluggish economic growth, lingering inflation and dwindling consumer demand are also a concern. “As Prime Minister, Mark Carney brings significant understanding and experience of capital markets and the economy to Ottawa,” says Ian McKinnon, Chief Investment Officer at our fund partner Addenda Capital. “With a minority government though, he’ll have to work with his peers and counterparts to push policy changes through, which may restrict some of his spending initiatives. There are also expectations for growing deficit spending directed at Canadian infrastructure and military enhancements, which should be supportive for the domestic economy.”

Corporate earnings and economic data were in focus

Investors had a flurry of economic information to absorb last week, starting with corporate earnings season, which shifted into high gear as approximately 180 companies on the S&P 500 reported quarterly results. The spotlight was on the Magnificent Seven, with Microsoft and Meta Platforms kicking things off for Big Tech on Wednesday. Microsoft reported revenue of US$70 billion versus the US$68.4 billion Wall Street was anticipating. Facebook and Instagram parent company Meta also beat expectations, outpacing the US$41.3 billion forecast with quarterly revenue of US$42.3 billion. After the closing bell on Thursday, Amazon reported revenue of US$155.7 billion, higher than the estimated US$155.1 billion. Apple reported revenue of US$95.4 billion, also above the $94.2 billion that was expected, but the company warned of a US$900 million headwind because of tariffs in the current quarter. The U.S. Commerce Department released first quarter GDP data on Wednesday that showed the economy decreased at a 0.3% annualized rate (the first contraction in three years). A flood of imports, with businesses trying to avoid additional tariff costs, was a significant factor. In a separate report, the core U.S. Personal Consumption Expenditures price index (the Federal Reserve’s preferred inflation gauge) was unchanged in March after surging 0.5% in February. In Canada, GDP shrank 0.2% in February, weaker than analysts’ expectations, with both the goods and services sectors contracting. On Friday, a U.S. Department of Labor report showed the U.S. economy added 177,000 nonfarm payroll jobs in April, and the unemployment rate held steady at 4.2%.