Shine is off Canadian stocks as tariff drama hurts tech and gold

Investment fund managers who pitched Toronto-listed stocks as a place to hide from a U.S. technology downturn have changed that advice because of U.

S. President Donald Trump’s tariffs. Canada’s benchmark S&P/TSX Composite Index outperformed the S&P 500 by around 10 percentage points over the past three quarters.



But the gauge shed 9.7 per cent over the past three trading sessions — its worst stretch since the onset of the COVID-19 pandemic in March 2020. “For Canada, specifically, we’re caught in the downdraft,” said David Picton, chief executive officer of Toronto-based Picton Mahoney Asset Management.

In January, he argued that Canadian stocks were an attractive alternative to overvalued U.S. equities, but he wasn’t banking on a full-blown trade war.

“So, in the short run, all bets are off,” Picton said. “This is a market backdrop that must be treated like a bit of a bear market, regardless of the market you’re in.” He’s using bounces to reduce positioning in underperforming sectors.

Trade War coverage on BNNBloomberg.ca Brian Madden, chief investment officer at First Avenue Investment Counsel, agreed that the near-term prospects for Canadian equities are grim. “If we don’t see some de-escalation, it’s very likely you’ll have a recession in Canada and the U.

S. and globally,” Madden said. Prime Minister Mark Carney said Monday that it would be difficult for the Canadian economy to avoid a downturn if the U.

S. enters one. Since Trump announced global tariffs on April 2, information technology names have performed the worst on the Toronto index — led by Shopify Inc.

, which has tumbled 22 per cent. The energy and materials sectors, which make up roughly 30 per cent of the TSX benchmark, also declined by double digits. Even gold stocks, which rallied over the past few months as a safe haven on concerns about what Trump’s tariff threats might do to the global economy, are now selling off.

Despite the declines, BMO Capital Markets Chief Investment Strategist Brian Belski stands by his prediction that the S&P/TSX will hit 28,500 points by the end of the year. “Investors should avoid overreacting and remember Canada has plenty of high-quality companies that can, should and will outperform,” he wrote in an April 7 note. Stephanie Hughes, Geoffrey Morgan and Curtis Heinzl, Bloomberg News ©2025 Bloomberg L.

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