Canada’s main stock exchange jumped on Tuesday, as investors assessed ongoing trade tensions between the U.S. and China.
S&P/TSX Composite gained more than 400 points, or 1.68% at 30,345.59. With traders returning after markets were closed in Canada on Monday for the country’s Thanksgiving Day holiday.
During the previous session on Friday, the index notched its sharpest fall in six months.
U.S. President Donald Trump had initially threatened to raise tariffs on China to triple-digits over Beijing’s expansion of rare earths export controls, leading to a equities in slump on Friday, although he later appeared to rein in this statement.
U.S. Treasury Secretary Scott Bessent has also reiterated that a much-anticipated meeting between Trump and Chinese counterpart Xi Jinping in South Korea later this month remains on track.
Despite signs of a more conciliatory stance from the White House, some concerns have continued to swirl around the intractable nature of the trade spat between the world’s two largest economies.
China has announced sanctions on five U.S.-connected subsidiaries of South Korean shipbuilder Hanwha Ocean, and Beijing and Washington will impose additional port fees on ocean shipping groups that transport everything from children’s toys to crude oil.
Bank earnings ahead
Against this backdrop, U.S. stocks slid, pointing to some reversal in gains logged in the prior session, as markets also prepared for an upcoming slate of earnings from Wall Street banking giants and comments from Federal Reserve policymakers.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. The benchmark S&P 500 had fallen by 68 points, or 1.0%, the tech-heavy Nasdaq Composite dropped 333 points, or 1.5%, and the blue-chip Dow Jones Industrial Average sank 393 points, or 0.9%.
Prior to the opening bell, JPMorgan Chase -- the largest U.S. lender -- will post results, along with peers such as Wells Fargo, Goldman Sachs and Citigroup. Rivals Bank of America and Morgan Stanley are later due to post their earnings on Wednesday.
The banks are anticipated to deliver mostly solid earnings, powered by a resilient U.S. economy that has supporting borrowing activity, buoying consumer and commercial lending divisions. Dealmaking has picked up as well following a stagnant period in the wake of Trump’s sweeping tariff announcements earlier this year, thanks to a mix of easing regulations and hopes for lower interest rates.
Still, observers will likely be keeping tabs on any remarks around the wider outlook, particularly after JPMorgan CEO Jamie Dimon warned of a correction in stocks within the next six months to two years, citing uncertainty around geopolitics, fiscal spending, and global remilitarization.
Powell speech in focus
Meanwhile, traders will likely be monitoring a speech by Fed Chair Jerome Powell at the National Association for Business Economics annual meeting.
Powell is seen "lament[ing]" a dearth of key economic data during an ongoing U.S. government shutdown, which has delayed the publication of several indicators the Fed uses to calibrate monetary policy, analysts at Vital Knowledge said in a note. Media reports have said furloughed government workers have been recalled to get out the September consumer price index, a crucial inflation gauge, but it is unclear when other postponed data points will arrive.
