‘Tug of war’: Markets contend with earnings results, escalating trade tensions

TORONTO – Canada’s main stock index notched another record high, while U.S. markets were mixed as investors weighed the impact of trade tensions and U.S. corporate earnings. 

Brian Madden, chief investment officer with First Avenue Investment Counsel, said stocks have generally benefited from an “ongoing bull market” that has been strong since April. 

Wednesday’s trading session came as Wall Street contended with an escalating trade war and the latest financial results from big U.S. banking and technology companies.

“In the tug of war between the corporate earnings and the trade tensions, the corporate earnings are winning. Whether that proves to be the right judgment or not, time will tell,” Madden said. 

“One thing we can say about corporate earnings is they’re factual, they’re historical, and they’re audited, whereas trade threats, tweets, policy and rhetoric are subject to a lot of backtracking and subsequent revisions.” 

Corporate profit reports are also under more scrutiny than usual as investors hunt for clues about the health of the U.S. economy. That’s because the U.S. government’s latest shutdown is delaying important updates on the economy, such as the report on inflation that was supposed to arrive Wednesday.

Several big banks also drove the U.S. market higher. Bank of America climbed 4.4 per cent after delivering a profit for the latest quarter that was stronger than analysts expected. 

Morgan Stanley rose 4.7 per cent after likewise reporting a stronger profit than analysts expected. That followed better-than-expected profit reports from several banks the day before, including JPMorgan Chase and Wells Fargo.

Technology stocks were among the heaviest weights pulling the U.S. market between gains and losses. The sector is particularly sensitive to escalations in the trade conflict between the U.S. and China. 

“As goes the Magnificent Seven, as people like to call them, so goes the S&P 500. They now collectively comprise about 34 (per cent), pushing 35 per cent of the index — just those seven names. They’re broadly stronger today,” Madden said. 

In New York, the Dow Jones industrial average was down 17.15 points at 46,253.31. The S&P 500 index was up 26.75 points at 6,671.06, while the Nasdaq composite was up 148.38 points at 22,670.08.

The S&P/TSX composite index was up 283.51 points at 30,637.12. 

Ahead of more earnings in Canada, Madden noted the market will likely focus on the gold sector, which has been “driving the TSX all year.” 

He said gold miners and gold royalty companies comprise a large portion of the TSX and will be up against “very high expectations.” 

Madden noted the sector is likely benefiting from the U.S. government shutdown and investors “perhaps losing confidence in the U.S. dollar and U.S. Treasury.” 

The December gold contract was up US$38.20 at US$4,201.60 an ounce. 

The Canadian dollar traded for 71.20 cents US compared with 71.19 cents US on Tuesday.   

The December crude oil contract was down 43 cents US at US$57.84 per barrel.

This report by The Canadian Press was first published Oct. 15, 2025.

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