Tariff exemption on electronics fuels Monday stock surge; Gardner flags investor shift to defensives
Stock markets in Canada and the US rallied Monday after news that the US would temporarily exempt electronics like smartphones and computers from tariffs, according to BNN Bloomberg.
Gains in tech stocks helped drive the surge, following a week of sharp market swings.
US President Donald Trump announced the exemption on Tuesday, saying it would apply to products such as smartphones and computers.
The tariffs, if applied, could have more than doubled prices for US consumers on goods coming from China.
“We saw some rallying out of that,” said Brianne Gardner, senior wealth manager of Velocity Investment Partners at Raymond James Ltd.
Gardner said the tariff news continued to dominate both headlines and trading.
Big tech names like Apple and Dell posted gains on Wall Street Monday following the announcement.
In Toronto, the S&P/TSX composite index closed up 278.73 points at 23,866.53.
Telecom and base metals subsectors led the Canadian market’s gains.
In New York, the Dow Jones industrial average closed 312.08 points higher at 40,524.79. The S&P 500 index rose 42.61 points to 5,405.97, and the Nasdaq composite added 107.03 points to reach 16,831.48.
Gardner said last week’s better-than-expected employment, Producer Price Index, and inflation data also contributed to market optimism.
“To us, that’s showing the market has something to feel good about,” she said.
Investors are also watching for the Bank of Canada’s rate announcement set for Wednesday.
Gardner said expectations suggest a pause in rate cuts, even with signs of economic weakness.
“We’ve seen 2.25 percent of cuts since June of last year,” he said, but questioned whether that would be enough if tariffs take effect and conditions deteriorate further: “Can we brace for that?”
She noted that market volatility creates buying opportunities for those with capital to invest.
“That’s a lot of how we’re positioning clients’ portfolios,” she said, adding that they assess “the underlying profitability of the companies that we’re invested in” and whether earnings will remain over the next six to 12 months.
Gardner said there are signs that investors are rotating into defensive sectors, including utilities and consumer staples, which are considered more resilient during economic downturns.
The Canadian dollar closed at 72.04 cents US, up from 71.99 cents US on Friday.
In commodities, the May crude oil contract ended up three cents US at US$61.53 per barrel.
The May natural gas contract fell 20 cents US to US$3.33 per mmBTU.
The June gold contract dropped US$18.30 to US$3,226.30 an ounce, while the May copper contract gained 10 cents US to US$4.63 a pound.
