The TSX ended a three-week slide, gaining 2.05% last week. The Dow, S&P 500 and Nasdaq declined for a fifth straight week, with the Dow and Nasdaq entering correction territory (down 10% from recent record highs).
Here’s a closer look:
Middle East developments dictated performance
The major North American stock indexes experienced sharp swings, as oil prices and geopolitical concerns in the Middle East weighed on investor sentiment.
Markets rallied on Monday after oil prices fell more than 10%, easing inflation concerns. Canada’s TSX rose 1.8%, its largest daily advance since mid February, led by gains in the technology and materials sectors. On Wall Street, the S&P 500 advanced 1.15%, while the Dow and Nasdaq each rose 1.38%, marking their strongest gains in several weeks. The rally followed comments from U.S. President Donald Trump indicating military strikes against Iranian power plants had been postponed.
Sentiment shifted on Tuesday, as oil prices bounced back and renewed tensions weighed on markets. The Dow slipped 0.2%, the S&P 500 fell 0.4% and the tech heavy Nasdaq declined 0.8%. Trump’s claim that discussions were underway with “the right people” in Iran initially lifted optimism, but that sentiment waned following reports that the Pentagon was preparing to deploy additional U.S. troops to the region. The TSX proved more resilient than its U.S. counterparts, edging up 0.2%, supported by the higher oil prices. The energy sector gained 1.7%, and materials rose 1.4% despite a modest pull-back in gold prices.
Markets rebounded on Wednesday after reports that the U.S. had delivered a 15 point proposal aimed at ending the Middle East conflict. Iranian officials denied plans for direct negotiations, but even a small sign of progress helped steady markets. All three major U.S. indexes finished higher, with the Dow gaining 0.7%, the S&P 500 rising 0.5% and the Nasdaq advancing 0.8%. Canada’s TSX climbed 1.4%, extending its winning streak to a third straight session.
Markets fell sharply on Thursday following reports that Iran was tightening control over the Strait of Hormuz. The S&P 500 fell 1.7%, marking its worst session since January, while the Dow lost 1%. The Nasdaq dropped 2.4%, leaving it more than 10% below its recent all time high and officially in correction territory. The TSX declined 1.53%. On Friday, President Trump extended his deadline for Iran to reopen the Strait of Hormuz, but it did little to calm markets. The Dow, S&P 500 and Nasdaq all closed at their lowest levels in more than seven months, with the Dow falling more than 10% from its February 10 record, confirming a correction. Higher oil prices helped the TSX avoid losses, with the index adding 0.2% for the day, and 2.1% for the week.
Big tech stocks were under pressure
Several large technology stocks declined on Thursday after a U.S. jury found Meta and Alphabet Inc. liable in a landmark social media addiction case. Meta shares fell roughly 8% on the day and remained down about 18% year to date. Alphabet shares dropped more than 3%. Although the financial penalties were modest relative to company size – US$2.1 million for Meta and US$900,000 for Alphabet – the decision marked a potential turning point that could invite further legal action and increase regulatory scrutiny. Tech-sector weakness extended to other members of the Magnificent Seven on Thursday, with Nvidia down 3.6% and Amazon lower by 1.8%.
Canada reached NATO spending target
Canada met NATO’s defence spending benchmark last week, with military spending now equal to 2% of the country’s gross domestic product for the first time in decades. While the development isn’t expected to drive near term market moves, it signals a shift toward higher federal spending that could influence longer term fiscal priorities. While still in the bottom one-third of NATO members, Canada's annual spending now sits at $63 billion. The goal to hit the 2% benchmark by March 31 was a pledge Prime Minister Mark Carney made when he took office in 2025. "This is the first time since the fall of the Berlin Wall that Canada will be spending 2% of GDP on defence," Carney said. "Canadians are responding to our renewed commitment and the call to serve."
Market volatility can reinforce the value of a long term investment strategy
While markets may react to shifting global events and short term volatility, a diversified, professionally managed portfolio is designed to help navigate the changing conditions. Staying focused on your long term goals can help you stay confident and well-positioned for future opportunities as markets evolve. A Co-operators financial representative is always ready to help if you have questions or would like to review your plan.
Canadian GDP and balance of trade data
Canadian gross domestic product was unchanged in January, while the trade deficit expanded to $3.6 billion. The deficit was led by a major drop in auto-related exports (down 21.2%) and an overall 4.7% decline for Canadian exports. February GDP data will be released on March 31, followed by balance of trade data on April 2.
More important dates
- April 3: Markets closed for Good Friday
- April 28 to 29: U.S. Federal Reserve interest rate announcement
- April 29: Bank of Canada interest rate announcement
- April 30: 2025 personal income tax filing deadline
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