Markets mixed as investors digest big tech earnings and U.S.-China trade

TORONTO – Canada’s main stock index finished in positive territory, helped by gains in the basic materials sector, while U.S. markets lost ground as investors digested big tech earnings and U.S.-China trade relations. 

“The markets right now might be in a period of consolidation. They’ve digested the good news. We’re waiting for what else is to come,” said Philip Petursson, chief investment strategist at IG Wealth Management. 

“That’s why I think we’re going to be searching for a direction for a little bit.” 

The S&P/TSX composite index was up 34.20 points at 30,178.98.            

In New York, the Dow Jones industrial average was down 109.88 points at 47,522.12. The S&P 500 index was down 68.25 points at 6,822.34, while the Nasdaq composite was down 377.33 points at 23,581.14.

Thursday’s trading session came amid a much-anticipated meeting between the leaders of the world’s two largest economies. U.S. President Donald Trump hailed his talk with China’s leader, Xi Jinping, as a “12” on a scale of zero to 10, and Trump said he would cut tariffs on China. 

After months of posturing, arguing and threatening, Trump and Xi Jinping have essentially turned back the clock. 

Petursson said the back-and-forth nature of the U.S.-China relationship does create an element of uncertainty, noting that Trump had threatened to raise tariffs on China and subsequently reversed course.

“Yet nothing has really changed in terms of any kind of reciprocity between trade (with) China and the United States,” he said. 

As earnings season continues, Petursson said that reports from U.S. companies have overall been positive. 

He also noted that AI spending among large U.S. tech firms has come into focus for market participants. 

Meta Platforms dropped 11.3 per cent on Thursday, cutting into what had been a nearly 30 per cent jump for the year so far, and was the heaviest weight on the S&P 500. Analysts said investors were likely perturbed by how much Facebook’s parent company said it’s planning to spend in 2026.

“They’re an advertising platform and so how does this investment in AI increase their ad revenues? And that’s the question I think the market is trying to digest,” Petursson said. 

He added that the market is focusing on whether large amounts of AI infrastructure spending are part of a plan for future returns, or it is “keeping up with the Joneses?” 

Companies across the industry have been on an investment spree to build out their artificial intelligence capabilities, and the concern is whether it will all pay off.

Meanwhile, Microsoft fell 2.9 per cent even though it reported stronger profit and revenue for the latest quarter than analysts expected. Analysts pointed to how it also expects to spend more on investments in 2026 than in 2025, while growth for its Azure business may have fallen a bit short of some investors’ expectations.

As more Canadian firms report their latest earnings results, Petursson said markets will be paying closer attention to forward guidance.

“We want to see this strength in earnings continue into the fourth quarter and into early 2026,” he said.  

“That will just give the market confidence that we’re not headed into a slow patch or we’re not facing a growth scare. And in fact, it might be the opposite, we’re in a normalized growth environment and companies should continue to see their earnings profile improve.” 

The Canadian dollar traded for 71.49 cents US compared with 71.86 cents US on Wednesday.   

The December crude oil contract was up nine cents US at US$60.57 per barrel. 

The December gold contract was up US$15.20 at US$4,015.90 an ounce. 

This report by The Canadian Press was first published Oct. 30, 2025.

— With files from The Associated Press.

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