S&P/TSX composite down nearly 300 points as deadline for 50% tariffs from U.S. nears

TORONTO – Canada’s main stock index lost ground on Tuesday as the midnight deadline neared for the U.S. to impose a 50 per cent tariff on some $28-billion worth of Canadian goods.

Canada-U.S. Trade Minister Dominic LeBlanc and the country’s chief trade negotiator, Janice Charette, have been in Washington since last week trying to broker a trade deal to prevent that from happening.

Pierre-Benoît Gauthier, vice-president of investment strategy at IG Wealth Management, said the tariffs may have an impact on smaller businesses, but the Canadian stock market is unlikely to face significant disruptions.

Despite the Tuesday decline, the TSX is still hovering around its record high.

“I don’t know if it’s complacency or if it’s wisdom, probably a bit of both, but the markets are really of the mind that these things will eventually get figured out and they’re not as worried about it as they were last year on Liberation Day, for example,” said Gauthier.

The S&P/TSX composite index was down 299.99 points at 36,367.93.

“In the grand scheme of things, the Canadian stock market is mostly Canadian banks, energy companies (and) materials companies. These companies, they’re making money these days,” he said.

Gauthier said even though gold was down on the day, “we are still seeing an upturn of positive momentum for gold and materials in general.”

The December gold contract was down US$53.10 at US$4,420.60 an ounce.

“Even if today was a little down day for this sector, the overall trend is supportive, and we are very hopeful about this part of the market,” he said.

Meanwhile, Wall Street pulled further from its all-time high on Tuesday as AI stocks got back to sinking.

The Dow Jones industrial average was down 116.38 points at 53,343.40. The S&P 500 index was down 53.30 points at 7,691.76, while the Nasdaq composite was down 355.20 points at 26,289.71.

Leading the way lower were stocks that have been big winners in the boom around artificial-intelligence technology. They’ve been veering up and down this summer on worries that their prices shot too high in the AI frenzy and that the strong demand for memory, processors and other building blocks of data centres may fizzle out if AI proves less profitable than promised.

Gauthier said U.S. bond yields were also driving some negative sentiment in the stock market.

The yield on the 10-year U.S. Treasury edged down to 4.70 per cent from 4.72 per cent late Monday but remains well above its 3.97 per cent level from just before the war with Iran began.

“The market is getting a little worried about the direction of inflation, the direction of long-term yields,” Gauthier said.

Yields have jumped since the Middle East war began because high oil prices are pushing upward on inflation.

The Canadian dollar traded for 72.00 cents US compared with 72.12 cents US on Monday.

The October crude oil contract was up 32 cents US at US$84.06 per barrel.

This report by The Canadian Press was first published Aug. 18, 2026.

—With files from The Associated Press

Companies in this story: (TSX: GSPTSE, TSX: CADUSD)