Why the TSX’s Record Close Could Flip Your Portfolio – Watch the Trade‑Tariff Ripple

• TSX closed at a historic 33,818, up 0.7% on the day and over 2% for the week.
• The Supreme Court’s strike‑down of President Trump’s global tariffs sparked a relief rally for trade‑exposed stocks.
• Mining giants Lundin and Wheaton Precious Metals led gains, while Shopify added nearly 2%.
• Major banks BMO and Royal Bank outperformed despite a soft US GDP print.
• Energy majors fell as oil prices slipped, highlighting sector divergence.

You missed the TSX’s record rally, and you’ll regret it.

The Canadian benchmark surged to 33,818 on Friday, a level never seen before, after the US Supreme Court nullified President Trump’s sweeping global tariff plan. The decision erased a key source of uncertainty for companies that rely heavily on cross‑border trade, unleashing a wave of buying across technology, industrials, and especially commodities. For investors, the rally offers a rare window to reassess exposure to Canada’s most influential sectors.

Why the Supreme Court Ruling Sent TSX Soaring

The court’s ruling removed the threat of new import duties that could have raised costs for firms ranging from software providers to heavy equipment manufacturers. When policy risk evaporates, the cost of capital drops, earnings forecasts improve, and valuations climb. This is precisely what happened to trade‑exposed names like Constellation Software and industrial leaders, which each jumped more than 3%.

In equity markets, a policy shock removal often triggers a “relief rally.” Investors reprice the risk premium, and the market price moves in the direction of lower perceived risk. The TSX’s 0.7% daily gain reflects that dynamic, and the broader 2% weekly increase marks the strongest week since January.

Mining Momentum: Lundin & Wheaton Lead the Charge

Mining stocks were the rally’s engine room. Lundin Mining surged 10.9% after reporting earnings that beat consensus on both revenue and margin fronts. The company’s diversified portfolio—copper, zinc, and gold—benefits from a commodities super‑cycle driven by global infrastructure spending and a weaker US dollar.

Wheaton Precious Metals added 3.3%, riding higher precious‑metal prices and its royalty‑based model, which offers upside without the operating risk of miners. Both firms illustrate why the materials sector is a high‑conviction play in the current environment.

Historically, whenever the TSX’s materials index outperforms, the broader index tends to follow. A look back at the 2016‑2017 copper rally shows a 12% spill‑over into the TSX within two months, suggesting a similar trajectory could be ahead.

Financials Defy Soft US GDP – What It Means for Banks

Bank of Montreal and Royal Bank of Canada each rose about 1%, outperforming the market despite a disappointing 1.4% US GDP print. The key driver was the removal of tariff uncertainty, which steadied cross‑border loan demand and kept corporate cash flows intact.

Both banks continue to post strong capital ratios—above 13% Common Equity Tier 1—providing a buffer against potential macro shocks. Their dividend yields remain attractive, hovering around 4.5%, making them compelling for income‑focused investors.

Energy’s Slip: Is Oil Still a Safe Bet?

Energy giants Suncor and Imperial Oil each slipped roughly 2% as crude prices retreated. The decline came after a 9‑million‑barrel draw in US inventories, which softened the earlier weekly oil rally.

While the energy sector is lagging the broader index, it still offers upside potential if OPEC+ maintains production discipline and geopolitical tensions keep supply tight. However, investors should be wary of the sector’s higher beta and sensitivity to macro‑economic data.

Historical Parallel: 2018 Trade Tensions and Market Reactions

In 2018, the US imposed tariffs on steel and aluminum, prompting a sharp sell‑off in Canadian industrials. The TSX fell 4% in the month, but once the tariffs were softened, the index rebounded with a 6% gain in the subsequent quarter.

The current scenario mirrors that pattern: a policy shock, followed by a swift market correction once the shock is removed. Investors who bought on the rebound in 2018 saw average returns of 15% over the next 12 months. The lesson is clear—positioning early after the uncertainty clears can capture outsized upside.

Investor Playbook: Bull vs Bear Scenarios

• Bull Case: Tariff uncertainty fully cleared, commodities rally continues, banks maintain earnings growth, energy recovers on supply constraints. Target allocations: 30% materials, 25% financials, 15% technology, 10% energy, 20% cash/alternatives.
• Bear Case: New 10% global levy announced by the White House takes effect, US inflation stays sticky, oil prices tumble below $70/barrel. Reduce exposure to high‑beta materials, tilt toward defensive utilities and dividend‑rich banks.

Bottom line: The TSX’s record close isn’t a fluke—it’s a market‑wide recalibration after a major policy risk vanished. Aligning your portfolio with the sectors that are benefiting now—materials and financials—while keeping a watchful eye on energy and potential policy reversals could be the difference between capturing a multi‑digit gain or watching the rally slip away.