Stocks Rise on Tariff Relief and Positive U.S. Economic Data

The U.S. and Canadian stock markets experienced a positive trend on Thursday, marking a second consecutive day of gains. Investors showed renewed interest in the markets after U.S. President Donald Trump rescinded tariff threats against European allies. This shift helped highlight the resilience of the American economy.

Market Performance

The uplift in stock prices followed a significant recovery in the S&P 500, which recorded its largest percentage gain in two months on Wednesday. This shift coincided with Trump’s announcement, indicating that the U.S. might be moving towards a resolution regarding recent geopolitical tensions.

Despite these gains, the major U.S. benchmarks remained down for the week, each experiencing losses earlier. The S&P 500 and the Nasdaq Composite both recorded declines of 0.4%, while the Dow Jones Industrial Average and S&P/TSX Composite Index were nearly unchanged.

Stock Index Highlights

• Dow Jones Industrial Average: Rose by 306.78 points (0.63%) to close at 49,384.01.
• S&P 500: Increased by 37.73 points (0.55%) to reach 6,913.35.
• Nasdaq Composite: Gained 211.20 points (0.91%), closing at 23,436.02.
• S&P/TSX Composite Index: Up by 151.17 points (0.5%) at 33,002.70.

Amid this volatility, the small-cap Russell 2000 index surged by 0.8%, achieving a new record closing high.

Geopolitical Impacts on Investment

Gregg Abella, CEO of Investment Partners Asset Management, emphasized the importance of managing portfolios amid geopolitical uncertainties. He noted that a diverse investment strategy is crucial to navigate the current market landscape.

Colin Cieszynski, chief market strategist at SIA Wealth Management, highlighted the strong performance of the Canadian economy amidst these events. He indicated that the ongoing rise in commodity prices is favorable for Canadian resource stocks.

Sector Performance

The materials group led the gains, rising by 2.2%, driven by surging gold prices. The precious metal surpassed US$4,900 per ounce, fueled by geopolitical tensions and a weakening U.S. dollar. Major stocks in this sector like New Gold Inc and Seabridge Gold Inc saw significant increases.

• New Gold Inc: Gained nearly 12%.
• Seabridge Gold Inc: Rose 12.6%.

Other sectors saw mixed results. Industrials increased by 0.7%, while consumer staples were up by 0.6%. However, energy sector stocks declined by 1.3% as oil prices fell by 2.1%, now priced at US$59.36 per barrel.

Upcoming Earnings Reports

The earnings season is gaining momentum, presenting potential challenges for market sentiment. The performance of several leading companies, often referred to as the “Magnificent Seven,” will be scrutinized closely as they report their earnings in the coming week.

• Meta: Increased by 5.7%.
• Tesla: Grew by 4.2%.

While most U.S. bank stocks have performed well, Huntington Bancshares dipped by 6% following disappointing quarterly results. Other banking stocks such as Fifth Third Bancorp and Regions Financial also saw declines.

Positive Economic Indicators

The recent U.S. economic data reinforces this positive market sentiment. Consumer spending showed solid growth in November and October. The personal consumption expenditures index reflects that the economy is likely on track for its third consecutive quarter of strong performance.

Furthermore, initial unemployment claims rose less than anticipated last week. The U.S. economy grew by about 4.4% in the third quarter of 2025, slightly exceeding forecasts.

As trading volumes returned to normal levels, with 18.3 billion shares exchanged across U.S. markets, the focus continues to remain on how evolving economic conditions will influence upcoming earnings reports and market performance.