Canada's main stock index ticked higher and U.S. markets drifted lower on Wednesday, as investors braced for earnings from U.S. tech heavyweight Nvidia after the bell and GDP numbers later in the week.
The S&P/TSX composite index rose 14.45 points to 26,283.45.
In New York, the Dow Jones industrial average dropped 244.95 points at 42,098.70. The S&P 500 index was down 32.99 points at 5,888.55, while the Nasdaq composite fell 98.23 points at 19,100.94.
Investors closely watch news from Nvidia, which makes the graphics chips used in artificial intelligence and gaming technology, because its sheer size can pull entire stock indexes sharply higher or lower.
"I think we saw a lot of propositioning for those earnings, which have been driving the market up since 2022," said Jules Boudreau, senior economist at Mackenzie Investments in Montreal.
After the close of trading, the Santa Clara, Calif.-based company reported first-quarter earnings of US$18.77 billion, or 76 cents US per share.
If not for a US$4.5 billion charge that Nvidia absorbed to account for the U.S. government’s restrictions on its chip sales to China, Nvidia would have made 96 cents US per share — far above the 73 cents US per share, excluding certain items, envisioned by analysts.
The performance helped Nvidia’s shares by gaining nearly four per cent in extended trading after the numbers came out.
"I think everyone who's predicted that these earnings would disappoint have themselves been disappointed," Boudreau said before the earnings release.
Meanwhile, Statistics Canada is set to release first-quarter gross domestic numbers on Friday.
Boudreau said markets are expecting 1.7 per cent growth, but his firm is a bit more pessimistic with a 1.5 per cent growth outlook. The Bank of Canada had earlier forecast 1.8 per cent growth for the first quarter.
"We think that tariffs had time to bite enough," he said.
"So it's still very far from a recession, but a meaningful slowdown from what the bank was expecting in January when it made that forecast."
Jitters over U.S. President Donald Trump's flurry of tariff threats against trading partners have seemed to ease somewhat, though the spectre continues to loom over the global economy.
Boudreau said one effective tactic to navigate the turmoil in recent months has been jokingly referred to by some Wall Street players as the "TACO trade" — Trump Always Chickens Out.
"So basically take the opposite view of whatever he's saying, because you know, he'll backtrack," Boudreau said.
"I think markets are still in that mode, but by definition that can't work forever."
The Canadian dollar closed at for 72.33 cents US compared with 72.60 cents US on Tuesday.
The July crude oil contract rose 95 cents US to US$61.84 per barrel and the July natural gas contract was down 19 cents US at US$3.56 per mmBTU.
The August gold contract was down US$5.90 at US$3,322.40 an ounce and the July copper contract was down about 6.6 cents US at US$4.67 a pound.
This report by The Canadian Press was first published May 28, 2025.
Companies in this story: (TSX: GSPTSE, TSX: CADUSD)
Lauren Krugel, The Canadian Press
