S&P/TSX composite closes higher, U.S. stock markets add to record highs
Equity markets responded positively to U.S. employment data, said Adelaide Chiu, portfolio manager, vice-president and head of responsible investing at NEI Investments.
A U.S. government report Thursday came in better than Wall Street expected, showing employers added 147,000 more jobs to their payrolls last month than they cut. The unexpected acceleration in hiring signals the U.S. job market is holding up despite worries about how U.S. President Donald Trump's tariffs may hurt the economy and drive inflation.
'Today, for sure, it was the jobs numbers coming out of the U.S., where the non-farm payrolls did beat expectations. And then we saw a positive reaction from equities,' Chiu said. She added that the strong U.S. job numbers often have a positive impact on the Canadian stock market as well.
Markets also reacted to the U.S. House of Representatives passing the massive tax and spending cuts package that Trump calls 'beautiful,' getting it to his desk a day before the July 4 deadline he had set.
The S&P/TSX composite index was up 164.60 points at 27,034.26.
In New York, the Dow Jones industrial average was up 344.11 points at 44,828.53, while the Nasdaq composite was up 207.97 points at 20,601.10. The S&P 500 index was up 51.93 points at 6,279.35, rising almost one per cent and setting an all-time high for the fourth time in five days.
However, Chiu said there's reason for caution.
'The market has definitely risen, and there are a lot of bulls out there with the expectation that the market will continue to rise. There are some indicators out there that also say that the market is quite overbought as well,' Chiu said.
'The risk to the downside is if there is any negative news that comes out, whether or not it is the tariffs or the talks with the ongoing conflict that is happening in the Middle East ... That can definitely bring parts of the market down, so I probably (have) more of a cautious stance as it is, especially with respect to market valuations.'
Canadian investors also sifted through data showing that Canada's economy has begun to diversify trade beyond the U.S.
Statistics Canada said Thursday that the country's merchandise trade deficit — the difference between how much we ship out and how much we bring in — narrowed to $5.9 billion in May as gold exports climbed higher.
The result compares with a trade deficit of $7.6 billion seen in April — a record high, which StatCan said Thursday was revised up from initial estimates of $7.1 billion.
'From a global perspective, we're seeing our Canadian exports actually rise, which I think is a positive in terms of the Canadian economy and how Canada is looking to diversify its trade,' Chiu said.
The Canadian dollar traded for 73.66 cents US compared with 73.41 cents US on Wednesday.
The August crude oil contract was down 45 cents US at US$67.00 per barrel.
The August gold contract was down US$16.80 at US$3,342.90 an ounce.
This report by The Canadian Press was first published July 3, 2025.
— With files from The Associated Press
Companies in this story: (TSX: GSPTSE, TSX: CADUSD)
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