The Toronto Stock Exchange (TSX) concluded a turbulent week on a positive note, with the S&P/TSX Composite Index gaining 174.72 points to close at 24,758.76. The market optimism stemmed from U.S. President Donald Trump’s decision to extend the easing of tariffs on Canada and Mexico until April 2, hinting at a potential resolution to the ongoing trade disputes.

Various sectors experienced gains, with Energy leading the way with a 2.3% increase, followed by Utilities at 1.5% and Telecoms at 1.3%. However, not all sectors fared well, as the Battery Metals Index and Base Metals saw slight declines of 1.3% and 0.6%, respectively. Investors, though hopeful, remained cautious as Trump criticized Canadian tariffs on dairy and lumber, hinting at possible reciprocal tariffs on Canadian goods.

The uncertainty surrounding trade relations between the U.S. and its neighbors was further highlighted by the Canadian government’s announcement of a $6.5 billion aid package for businesses affected by the trade war initiated just last week. Robert Embree, a senior economist at Rosenberg Research, noted that the soft Canadian employment report could pave the way for a rate cut at the upcoming Bank of Canada meeting, with future easing measures highly probable.

The labor market in Canada showed signs of weakness, with employment figures falling short of expectations. This disappointing data, coupled with tariff uncertainties, reinforced the likelihood of a rate cut by the Bank of Canada. Market analysts, including Macquarie, maintained their stance on the Federal Reserve’s policy, predicting no rate cuts in 2025 despite a softening U.S. labor market.

In the commodities market, West Texas Intermediate crude oil prices rose following reports that OPEC+ might delay the return of daily production cuts. Gold prices, on the other hand, experienced a slight decline despite a weakened dollar. The outlook for gold remains positive, with experts anticipating a continued bullish trend in the market.

Looking ahead, market participants are closely monitoring developments in trade negotiations and economic indicators, which are expected to influence the future direction of the TSX. The overall sentiment remains cautiously optimistic, with a focus on geopolitical events and their impact on market volatility.