Canada’s main stock index slipped Monday as falling gold prices weighed heavily on mining shares, while U.S. markets climbed to new record highs amid renewed optimism over trade relations between Washington and Beijing.
The S&P/TSX composite index dropped 77.31 points to 30,275.76, led lower by declines in major gold producers. In contrast, U.S. markets posted another day of broad gains, with the Dow Jones industrial average up 337.47 points to 47,544.59, the S&P 500 rising 83.47 points to 6,875.16, and the Nasdaq composite advancing 432.59 points to 23,637.46 — all closing at all-time highs for the second consecutive session.
Dustin Reid, chief strategist for fixed income at Mackenzie Investments, said the divergence between the Canadian and U.S. markets was largely driven by commodity weakness.
“From a pure commodity perspective, gold and silver, and a number of other metals are lower, which is having an outsized impact on Canada versus the U.S.,” Reid explained.
The December gold contract fell US$118.10 to US$4,019.70 an ounce, marking one of the steepest single-day declines this quarter. Crude oil also edged lower, with the December crude contract down 19 cents to US$61.31 per barrel.
Meanwhile, investor sentiment in the U.S. turned positive as Treasury Secretary Scott Bessent said there was “a framework” for discussions between President Donald Trump and Chinese President Xi Jinping, who are set to meet Thursday. Trump added, “We feel good about working things out with China,” signaling potential progress in easing trade tensions between the world’s two largest economies.
Asian markets rallied earlier in the day on hopes that the summit could help stabilize global trade and growth.
In New York, traders were also buoyed by strong momentum in the technology sector ahead of a wave of key corporate earnings. Major players including Alphabet, Meta Platforms, and Microsoft are set to report results Wednesday, followed by Amazon and Apple on Thursday.
“The AI story — and particularly the AI capex spending cycle — has been a key driver for markets and the economy,” Reid said. “Many investors are watching to see if this wave of spending continues or if we’re reaching a plateau.”
AI-linked stocks continued to soar: Nvidia is up 42.6% so far this year, while Qualcomm jumped 11.1% Monday after unveiling new data centre AI chips. Analysts remain split on whether the current surge represents sustainable growth or the makings of another tech bubble reminiscent of the early 2000s dot-com era.
Closer to home, attention now turns to the Bank of Canada’s upcoming interest rate decision on Wednesday. Most economists expect the central bank to deliver a second consecutive quarter-point cut, despite stronger job numbers and lingering inflation pressures.
“The market is well priced for a cut — it would be surprising if the bank didn’t move,” Reid said.
The Canadian dollar traded slightly higher at 71.45 cents U.S., compared with 71.36 cents on Friday.
While gold’s slide weighed on Toronto’s benchmark index, analysts said optimism surrounding the U.S.-China talks and expectations of rate relief in Canada could offer investors some relief later in the week.