Canada’s main stock index gained on Wednesday (January 8), driven by strength in tech and mining stocks.
Investors continue to weigh the impact of potential US trade policy changes under President-elect Donald Trump, as well as his renewed interest in taking ownership of Greenland, an idea he first raised in 2019.
The tech sector led gains in Canada, rising 1.8 percent after sharp losses earlier in the week. Mining stocks also supported the index, with the materials group adding 1.7 percent as gold and copper prices strengthened. The sector’s performance was bolstered by expectations that a weaker US dollar could make commodities more attractive globally.
On the other hand, some Canadian exporters and manufacturers remain cautious about the possible tariffs. Concerns have been raised about how universal tariffs might affect industries reliant on cross-border trade with the US.
In the US, major indexes continued to rally, led by gains in large-cap tech stocks.
The US dollar’s weakness, reversing its recent surge, was another key factor driving gains in equities.
Trump’s actions are drawing comparisons to his first term, when abrupt policy announcements frequently impacted global markets. In 2019, the president-elect invoked IEEPA to threaten tariffs on Mexican imports; however, the move was later withdrawn following a bilateral agreement on immigration measures.
Commodities prices broadly saw gains as the US dollar weakened. For its part, the Canadian dollar remained relatively steady, benefiting from higher commodities prices, but tempered by broader market caution.
Oil prices, however, remained under pressure, with concerns about global demand overshadowing temporary gains in other asset classes. Energy stocks in Canada showed mixed performances.
As mentioned, markets are also fluctuating in part due to Trump’s renewed interest in Greenland.
In addition to his comments, Donald Trump Jr.’s visit to Greenland this week, described as a personal trip, has drawn attention to the island’s strategic location and resources, including rare earths.
While both Greenland and Denmark have dismissed the possibility of a sale, US interest in Greenland continues to make headlines, particularly regarding its importance for defense and natural resource availability.
Greenland is an autonomous territory of Denmark, and the country’s foreign minister has said Greenland has the right to pursue independence if its residents choose; even so, he rejected the idea that it could become a US state.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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