Canada's main stock index edged lower in choppy trading on Thursday, mirroring its Wall Street peers, after the U.S. House of Representatives passed President Donald Trump's tax bill that is widely expected to add to the country's debt burden.
The TSX Composite Index climbed to within 9.06 points of breakeven to 25,830.11.
The Canadian dollar backed off 0.02 cents at 72.12 cents U.S.
The Republican-controlled U.S. House of Representatives passed a sweeping tax and spending bill by a single vote. The bill would enact much of Trump's policy agenda.
If the bill becomes law, it is expected to add about $3.8 trillion over the next decade to the U.S. federal government's current $36.2 trillion debt, according to the nonpartisan Congressional Budget Office.
On Wednesday, federal Finance Minister François-Philippe Champagne said he had a good meeting with U.S. Treasury Secretary Scott Bessent and that both were pleased with the progress they were making. This follows Trump and Prime Minister Mark Carney's agreement earlier this month to initiate serious talks on a new relationship.
In corporate news, TD Bank reported a fall in second-quarter profit, as the Canadian lender stockpiled money to cover for potential bad loans in an uncertain economic environment. TD also announced cuts to 2% of its workforce to cut costs.
Shares in the bank gained $2.84, or 3.2%, to $92.74.
On the economic slate, Statistics Canada reports that, in April, the Industrial Product Price Index declined 0.8% month over month and increased 2.0% year over year.
Meanwhile, the Raw Materials Price Index fell 3.0% month over month and declined 3.6% year over year.
ON BAYSTREET
The TSX Venture Exchange gave back 1.87 points to 676.81.
Seven of the 12 subgroups were in the red by midday Thursday, as energy faltered 1%, while utilities and materials fell 0.8% each.
The five gainers were led by financials, up 0.6%, information technology, up 0.5%, and telecoms eked up 0.2%.
ON WALLSTREET
Stocks were trading little changed Thursday, as investors tried to shake off fears of rising rates and worries about a ballooning U.S. deficit.
The 30-year Treasury yield hit its highest since October 2023 as lawmakers passed a bill that investors fear could worsen the U.S. deficit.
The Dow Jones Industrials gained 39.04 points to 41,899.48.
The S&P 500 edged up 6.94 points to 5,851.55
The NASDAQ Composite recovered 111.54 points to 18,984.18.
In a party line vote early Thursday, House members approved the bill that includes lower taxes and additional military spending. The bill — which now goes to the Senate — could increase the U.S. government’s debt by trillions and raise the deficit at a time when fears of a flare-up in inflation due to Trump tariffs are already weighing on bond prices and boosting yields. The Congressional Budget Office puts the price tag for bill at nearly $4 trillion.
Long-dated bonds sold off as traders worried a new budget bill would worsen the U.S. deficit. The measure is expected to pass as lawmakers reach a compromise on state and local tax deductions heading into Speaker Mike Johnson’s Memorial Day deadline. Yields spiked even higher after a poor afternoon auction for 20-year debt, raising fears investors may be losing their appetite for funding America’s deficits.
Target shares dropped 5.2% after the big box retailer cut its full-year sales outlook, with executives citing tariff uncertainty and a backlash to the company’s pullback in diversity, equity and inclusion efforts.
Prices for the 10-year Treasury were higher by noon EDT Thursday, lowering yields to 4.56% from Wednesday’s 4.6%. Treasury prices and yields move in opposite directions.
Oil prices lurched lower 86 cents to $60.71 U.S. a barrel.
Prices for gold faded $20.90 to $3,292.60.
