TORONTO — Canada’s main stock index slid almost 300 points on Friday despite the latest GDP report pointing to a strengthening economy as trade tensions prevail.
“I know that GDP was strong, but I think there are fears on both sides of the border about renewed tariffs or trade tensions, if you will, in terms of what could come next and the tit-for-tat that’s going on,” said Carol Schleif, chief market strategist at BMO Wealth Management.
But Schleif suggested taking late-summer Friday’s market moves with a grain of salt.
“It’s going to be hard to read too much long-term out of what the markets are doing in the afternoon on a Friday in the summer,” she said.
“Trading tends to be late; a lot of people are on vacation.”
The S&P/TSX composite index was down 280.33 points at 36,553.92.
In New York, the Dow Jones industrial average was down 9.45 points at 53,559.99. The S&P 500 index was down 19.23 points at 7,711.76, while the Nasdaq composite was down 138.93 points at 26,402.42.
Schleif said markets on both sides of the border are also unpacking U.S. Federal Reserve chair Kevin Warsh’s commentary at the economic symposium in Jackson Hole, Wyo., on Friday.
In his first high-profile speech, Warsh said inflation is still too high in the U.S., signalling that the Fed may have to raise interest rates in the coming months to bring it down. The U.S. bond markets jumped on the potential for a September rate hike.
“For the most part, it gave the market a little more grit in terms of what it had been looking for,” Schleif said.
Overall, she said the Jackson Hole Symposium appeared positive for the U.S. and Canada.
“There’s a really nice picture with Tiff Macklem and Warsh — they’re looking very friendly,” she said. “It’s always good when the people on the front lines making policy are on good terms.”
Meanwhile, Bank of Canada governor Macklem will be up next week with his latest decision on interest rates, shortly after trade talks between Canada and the United States fell apart.
The United States imposed 50 per cent tariffs on roughly five per cent of Canadian exports on Aug. 22, and Canada plans to retaliate with its own counter-tariffs starting Sept. 8.
The Canadian central bank has kept its benchmark rate on hold at 2.25 per cent for nearly a year now, and a broader consensus among economists is signalling another rate hold.
While the economy could slow with a prolonged trade dispute, Schleif said the TSX isn’t going to be affected by tariffs as much, considering its composition.
“The TSX is moving based on miners and financials and things that tend to be in pretty good stead and are benefiting from the fact that you had 3.3 per cent GDP growth,” she said.
Statistics Canada reported real gross domestic product rose 3.3 per cent in the second quarter on an annualized basis — the fastest pace in more than three years as exports and business capital investment ramped up.
Schleif said investors have so far remained resilient despite the geopolitical backdrop, with the TSX’s year-to-date return tallying 15 per cent.
The Canadian dollar traded for 72.00 cents US compared with 72.14 cents US on Thursday.
The October crude oil contract was down 13 cents US at US$83.40 per barrel.
The December gold contract was down US$134.10 at US$4,529.90 an ounce.
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Ritika Dubey, The Canadian Press
With files from The Associated Press
This report by The Canadian Press was first published Aug. 28, 2026.
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