Canadian Stocks Advance As Talks With U.S. To Avoid New Tariffs Enter Final Stretch

(RTTNews) - Canadian stocks moved higher on Friday as traders await a breakthrough in the ongoing Canada-U.S. negotiations to avert 50% tariffs on Canadian exports to the U.S. A surge in the materials sector owing to a sharp jump in gold-linked metal stocks supported the market.

After opening above yesterday's close, today the benchmark S&P/TSX Composite Index lost momentum but traded positive throughout the session before settling at 36,620.23, up by 254.81 points (or 0.70%).

Five of the 11 sectors posted gains today, with the materials sector leading the pack.

Accusing Canada of discriminatory treatment against American products, early in July, U.S. President Donald Trump announced 50% tariffs on a wide range of Canadian imports coming into the U.S.

Lamenting that Canada's behavior affects U.S. automobiles, alcoholic beverages, and dairy industries, Trump announced that the new levies would take effect from August 19.

Negotiators from Canada headed by Canada-U.S. Trade Minister Dominic LeBlanc are camped in Washington to meet with their U.S. counterparts to present a draft agreement to Trump for him to revisit his decision.

Hours before the taxes were set to kick in, Trump announced pausing the tariff imposition for three days as he was informed that a pact was in the final stages.

The new 50% tariffs, if imposed, could affect nearly $20 billion worth of Canadian exports to the U.S.

Investors are watching out for positive signals from the trade talks with cautious optimism. The talks have reached a crucial stage with the new deadline set to lapse in a few hours.

Citing sources, CBC News reported that the forthcoming agreement would lower tariffs on Canadian steel and aluminum from 50% to 25% and also change how dairy import licenses are allocated by the government.

On July 1, the Trump administration refused to allow an extension of the Canada-United States-Mexico Agreement for free trade.

The CUSMA deal was signed by the three nations during Trump's first term as U.S. President in its original form. The U.S. opted to extend it for 10 years with mandatory annual reviews instead.

Yesterday, Trump announced through Truth Social, crushing economic operations against Iran on an unprecedented scale. Trump also warned that any country offering any form of support to Iran would face the same fate.

In an interview with CNBC on Thursday, U.S. Treasury Secretary Scott Bessent viewed that the latest moves by Trump to enforce stringent economic measures on Iran negated the need for any U.S. military operation.

Trump's change of stance from military threats to economic pressure against Iran for a deal favoring the U.S. lowered the safe-haven demand for the U.S. dollar.

Consequently, gold prices surged, pushing gold-linked metal sector to soar offering support to the index.

The business barometer long-term index released by the Canadian Federation of Independent Business today revealed a fall to 57.60 in August from 58.60 in June. Though hiring intentions were broadly unchanged, more firms (around 15%) planned to lay off than those who sought to hire (nearly 13%).

Data released by Statistics Canada today revealed that retail sales have fallen by 0.80% from the previous month in July, according to flash estimate.

Major sectors that gained in today's trading were Materials (2.91%), Consumer Discretionary (1.16%), Industrials 0.61(%), Energy (0.46%), and Financials (0.26%).

Among the individual stocks, Ero Copper Corp (9.21%), G Mining Ventures Corp (8.58%), Ivanhoe Mines Ltd (8.32%), Eldorado Gold Corporation (6.93%), Hudbay Minerals Inc (6.49%), and Linamar Corp (4.21%) were the prominent gainers.

Major sectors that lost in today's trading were Utilities (2.39%), Healthcare (0.95%), Real Estate (0.86%), Communication Services (0.45%), and IT (0.40%).

Among the individual stocks, Canadian Utilities Ltd (3.58%), Emera Incorporated (3.52%), Atco Ltd (3.42%), Hydro One Limited (3.36%), Bausch Health Companies Inc (6.27%), and Granite Real Estate Investment Trust (2.31%) were the notable losers.

Denison Mines Corp (10.83%) and Energy Fuels Inc (8.64%) were among the prime market-moving stocks today.