Markets fall amid uptick in volatility and trade tensions between U.S. and China

TORONTO – Canada’s main stock index finished more than 170 points lower Thursday, while U.S. stock markets saw declines, as stocks reversed course from late-morning gains. 

Adam Ludwick, director of asset allocation at Aviso, said markets have started to see some volatility, which began last week, based on a few factors. 

“You’re seeing a little bit of the uptick (in volatility) because of some of the trade tensions with China and the U.S., the ongoing negotiations between the U.S. and Canada as well,” he said. 

Thursday’s swings on Wall Street fit the pattern of the week for stocks. They’ve been shaky since the end of last week, when U.S. President Donald Trump shattered a monthslong calm in the U.S. stock market by threatening much higher tariffs on China.

“This renewed tension between the U.S. and China that kicked off on Friday, and it’s seemingly gone tit for tat back and forth over this week, is creating a bit of unrest in the market and a little bit of uncertainty,” Ludwick said. 

He also noted the ongoing U.S. government shutdown has not helped. 

“You have the government shut down in the U.S., which you’ve had data from the beginning of the month for the labour market that has been delayed. We were supposed to have inflation data in the U.S., and now it’s been pushed out to late October,” he said. 

But the release of more earnings could help calm the situation if there is more confidence in corporate profits, Ludwick said.

With some Canadian firms set to begin reporting earnings next week, he noted markets will be hoping for a “positive outlook” from companies regarding the health of the economy and the Canadian consumer, as well as for any guidance provided for the fourth quarter.

The S&P/TSX composite index was down 178.32 points at 30,458.80.   

In New York, the Dow Jones industrial average was down 301.07 points at 45,952.24. The S&P 500 index was down 41.99 points at 6,629.07, while the Nasdaq composite was down 107.54 points at 22,562.54.

Regarding trade tensions between Canada and the U.S., Prime Minister Mark Carney rejected calls for Ottawa to push back against the U.S. with new retaliatory trade measures as talks with Washington progress on sector-specific trade deals.

“There’s times to hit back and there’s times to talk, and right now is the time to talk,” Carney said at a news conference in Toronto on Thursday.

Ludwick noted Canadian investors would like clarity.   

“As a Canadian investor or someone in our role of asset allocation, we just want certainty; we want to know there’s a deal in place. It’ll give us a little bit more confidence in the future in terms of specifically steel and autos, but just for the Canadian economy in general,” he said. 

Thursday’s trading day also occurred as gold prices continued to soar. The December gold contract was up US$103.00 at US$4,304.60 an ounce.

“It’s not just about inflation and rate cuts. It is also a reflection of that uncertainty that I was referring to earlier. People tend to move to gold when there’s the need for a safe-haven asset,” Ludwick said. 

The Canadian dollar traded for 71.18 cents US compared with 71.20 cents US on Wednesday.

The December crude oil contract was down 85 cents US at US$56.99 per barrel.

This report by The Canadian Press was first published Oct. 16, 2025.

— With files from The Associated Press

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