TORONTO — Canada’s main stock index continued its losses Tuesday, while U.S. markets also fell as tariff tensions between the two countries mounted.

“The story for today is the story for the week and for the month and for the year to date, and it’s drama on the tariff files,” said Brian Madden, chief investment officer with First Avenue Investment Counsel.

“It’s a cliché to say that markets abhor uncertainty, but they do, and we’re seeing it here.”

The S&P/TSX composite index closed down 132.51 points at 24,248.20 on Tuesday.

In New York, markets briefly fell 10 per cent below records set last month.

The Dow Jones industrial average was down 478.23 points at 41,433.48, losing 1.1 per cent. The S&P 500 index was down 42.49 points at 5,572.07, after swinging between gains and a loss of 1.5 per cent, while the Nasdaq composite was down 32.23 points at 17,436.10, a more modest loss of 0.2 per cent.

Markets started to recover from Monday’s slide in early trading but then more tariff talk from U.S. President Trump, who threatened to double upcoming aluminum and steel tariffs, sent them careening lower again, said Madden.

The threat was in retaliation to Ontario’s decision to place a surcharge on electricity exports to the U.S.

“That saw the market down near its lowest levels of the day,” said Madden.

However, markets started turning around in the afternoon after Ontario Premier Doug Ford suspended the surcharge.

“As soon as that news landed, we saw markets start to perk up a little bit,” said Madden.

But by the end of the day, markets had taken a downward turn again, though they ended above their earlier lows.

Wednesday will bring the next interest rate decision from the Bank of Canada, which is all but certain to cut its key rate, said Madden.

It will also bring fresh data on inflation in the U.S.

“Inflation has been not that well behaved in the U.S. in recent months,” said Madden.

“The expectation is that it’s going to come down a tick tomorrow. If it doesn’t, that might cause some concerns in the market.”

The Canadian dollar traded for 69.20 cents US compared with 69.19 cents US on Monday.

The April crude oil contract was up 22 cents at US$66.25 per barrel and the April natural gas contract was down four cents at US$4.45 per mmBTU.

The April gold contract was up US$21.50 at US$2,920.90 an ounce and the May copper contract was up 10 cents at US$4.77 a pound.

With files from The Associated Press

This report by The Canadian Press was first published March 11, 2025.

Rosa Saba, The Canadian Press