As you know, things came to a head Tuesday on the stock markets. The S&P/TSX composite index soared by 201.40 points, finishing at 24,067.93. U.S. stock markets cratered today. The Dow Jones industrial average fell 155.83 points, closing at 40,368.96. The S&P 500 and Nasdaq composite fell in sympathy, losing 9.34 points and 8.32 points, respectively.
The loonie on the currency markets was worth 71.77 cents U.S. today. That’s a 3.11 cent drop from its trading value of 72.04 cents U.S. on Monday. This swing again underscores the continuing uncertainty in the foreign exchange market driven by numerous economic undercurrents and the perception by investors.
In commodities, the June gold contract was up big, gaining US$14.10 to $3,240.40 an ounce. This uptick is a sign of increasing demand for gold as a safe-haven asset as global market uncertainty continues to rise. The June crude oil contract fell by 30 cents, closing at US$60.75 per barrel. This decrease is a result of the persistent volatility in oil prices, caused by supply-demand dynamics and geopolitical tensions affecting production.
The most-active May copper contract also finished flat, closing unchanged at US$4.63 per pound. By contrast, the Henry Hub natural gas spot price averaged half a penny higher, at US$3.33 per mmBTU on the May natural gas contract. The effects of fluctuations in commodity prices can have significant effects—in all directions—on various industries and the economy as a whole. That is particularly the case for material-intensive industries.
With import controls on several manufacturing inputs under the Canada-U.S.-Mexico Agreement (CUSMA), manufacturers did their best to mitigate disruptions. Under the agreement, manufacturers can bring a limited number of vehicles into the country tariff-free. To keep qualifying, they need to keep production flourishing and keep reinvesting in Canada. Strong enforcement of CUSMA will continue to be essential as manufacturers work to maintain a competitive cost of production and access to markets.
