TORONTO — The materials sector helped lift Canada's main stock index to finish higher on Friday, while U.S. markets were down after the release of economic data on both sides of the border.
Greg Taylor, chief investment officer at PenderFund Capital Management, said markets moved toward a risk-off posture.
“I think what's compounding that a little bit is that August, which is normally one of the seasonally worst months of the year, is actually having a pretty good month,” he said.
“I think traders and investors are just looking at taking some profits and locking in some gains ahead of September, which is normally, again, another volatile period.”
The S&P/TSX composite index was up 129.65 points at 28,564.45.
In New York, the Dow Jones industrial average was down 92.02 points at 45,544.88. The S&P 500 index was down 41.60 points at 6,460.26, while the Nasdaq composite was down 249.61 points at 21,455.55.
Friday’s trading session came amid the release of U.S. inflation data.
The Federal Reserve’s preferred inflation gauge mostly held steady last month despite U.S. President Donald Trump’s broad-based tariffs, but a measure of underlying inflation increased.
The U.S. Commerce Department said prices rose 2.6 per cent in July compared with a year ago, as measured by the personal consumption expenditures index. That’s the same annual increase as in June and in line with what economists expected.
"(It) came in basically in line with expectations, and it is a touch higher than I think some would like, and that's a concern. But it also feels like the U.S. central banks are pivoting away from focusing on inflation and more looking at payrolls," Taylor said.
Meanwhile, Canadian investors digested new gross domestic product data, showing the economy contracted in the second quarter as U.S. tariffs and trade uncertainty tanked Canadian exports.
Statistics Canada said Friday that real gross domestic product declined 1.6 per cent on an annualized basis in the second quarter, thanks to a sharp drop-off in exports and business investment. That's down from annualized growth of two per cent in the first quarter, a figure StatCan revised down Friday from 2.2 per cent originally.
“The Canadian economy is definitely struggling and under some stress. And I don't think anyone's really shocked to see some impact given the tariffs and what's going on with the real estate sector and such,” Taylor said.
“So I think it's kind of priced in there, but it's not having an overall big impact on the market. And I think that's because most people expected this.”
The December gold contract was up US$41.80 at US$3,516.10 an ounce.
With gold prices crossing over US$3,500 on Friday, Taylor said the commodity is having another “good run.”
“That's notable because when you've got markets going up and also gold going up, it's showing that there's a lot of inflation in the system,” he said.
Taylor added that the performance of gold is helping the TSX gold sector.
The Canadian dollar traded for 72.77 cents US compared with 72.70 cents US on Thursday.
The October crude oil contract was down 59 cents US at US$64.01 per barrel.
This report by The Canadian Press was first published Aug. 29, 2025.
— With files from The Associated Press.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Daniel Johnson, The Canadian Press
