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The US dollar index hovered around 97 on Monday, holding steady after President Donald Trump confirmed that his sweeping reciprocal tariffs will take effect on August 1.

Treasury Secretary Scott Bessent stated the tariffs would revert to April 2 levels for countries that have not reached a trade agreement with the US by then, effectively giving trading partners more time to renegotiate terms. So far, only China, the UK, and Vietnam have secured some form of deal with Washington.

Last week, the dollar fell to its lowest level in over three years, pressured by rising tariff risks, mounting fiscal concerns, and expectations of deeper Federal Reserve rate cuts.

However, stronger-than-expected US jobs data helped ease those worries.

The economy added 147,000 jobs in June, surpassing forecasts of 110,000 and slightly up from May’s 144,000, tempering recession fears and reducing immediate pressure on the Fed to lower rates further.

The S&P/ASX 200 opened flat to around 8,600 on Monday, halting gains from the previous session, as investors braced for a widely expected rate cut by the Reserve Bank of Australia and looming US tariff deadlines.

Market expectations are mounting that the RBA will continue easing monetary policy, with now a 95% probability priced in for a 25bps cut on Tuesday—its third cut this year.

That would bring the official cash rate down to 3.6%, in response to easing inflation risks and a weakening economic growth.

Meanwhile, President Trump confirmed new tariffs will take effect on August 1, with final rates still under negotiation.

Treasury Secretary Bessent said countries without trade deals by then will face tariff levels reverting to those set on April 2.

Among notable movers, export-reliant healthcare stocks jumped over 1%, led by biotech giant CSL (1.2%).

On the flip side, Woodside dropped 0.9% as OPEC+ signaled higher August output, raising supply concerns that could pressure prices.

The S&P/TSX Composite Index is up 343.84 points or 1.29% this week to 27036.16

• Largest one-week point and percentage gain since the week ending May 16, 2025
• Up for two consecutive weeks
• Up 538.59 points or 2.03% over the last two weeks
• Largest two-week point and percentage gain since the week ending June 6, 2025
• Up 11 of the past 13 weeks
• Today it is up 1.90 points or 0.01%
• A new record close
• Up for four consecutive trading days
• Up 343.84 points or 1.29% over the last four trading days
• Largest four-day point and percentage gain since Wednesday, May 28, 2025
• Longest winning streak since Wednesday, May 28, 2025 when the market rose for five straight trading days
• Up seven of the past nine trading days
• Up 7.85% from the Inauguration Day close of 25067.92 on Monday, Jan 20, 2025
• Up 23.56% from its 52-week low of 21880.95 hit Wednesday, Aug. 7, 2024
• Rose 22.56% from 52 weeks ago
• Up 20.12% from its 2025 closing low of 22506.90 hit Tuesday, April 8, 2025
• Year-to-date it is up 2308.22 points or 9.33%

Source: Dow Jones Market Data, FactSet

The Toronto Stock Exchange posted its fourth-straight record close on Friday, sticking above the 27,000 mark for a second day but gains are slowing as it managed just a minor rise.

The S&P/TSX Composite Index closed up 1.9 points to 27,036.16, just topping Thursday's prior record close of 27,034.26. Telecoms and Utilities were up 0.37% and 0.20%, respectively, leading gains, while Information Technology and Battery Metals Index were at the bottom of the list.

Douglas Porter, chief economist at BMO Capital Markets, said in his weekly 'Talking Points' noted there was no shortage of key economic news and events packed into this holiday-shortened week. He said the most notable end result was that equity markets "kept right on keeping on", reflecting a broad rally.

"So broad, in fact, that the TSX has steamrolled above 27,000 for the first time, with almost an unbroken string of advances in the past three months; it has now risen in 11 of the past 13 weeks," Porter added. Globally, it's a broadly similar tale for the MSCI All Countries index, which is now up almost 7% year to date, also reaching a record high, he noted.

According to Porter, the three major drivers for markets this week were economic news, a new budget bill in the United States and trade developments, with the latter impacting Canada most. He noted Canada and Mexico were not included in the new U.S. reciprocal tariffs and are being handled separately. Talks with Canada were paused last week over its Digital Services Tax, but after Canada backed down, negotiations resumed. Both countries hope to reach a deal by July 21, though that date is self-imposed.

Porter said while Canada's economy has held up a bit better than BMO initially expected to the trade war, in part because the average U.S. tariff on Canada is a "manageable" 6%, he added "there are some signs of strain" as the deep merchandise trade deficit of $5.9 billion was the second largest on record, topped only by April's "whopping" $7.6 billion shortfall, and real exports were down 5% from last year's average level.

Porter said Canada's trade figures have been "wildly skewed" by tariff front-running that was followed by a "deep sag", but also by a surge in gold exports. Looking through the dense fog, he added, it's clear that net exports will sap second-quarter GDP, probably to a greater extent than the calm monthly output figures imply.

Along with a drop in oil production amid the spring wildfires, BMO downgraded its call on the quarter to -0.8% a.r., although it also expects less softness in the third quarter as a partial offset. "If Ottawa does indeed manage to secure even a trade framework this summer, which provides some clarity, we will be upgrading our H2 growth outlook. Less uncertainty, coupled with solid financial markets, and what's now looking like a bountiful fiscal push, could lift growth much higher than our current call of a small dip in Q3 and a 1% advance in Q4."

Of commodities, gold held steady Friday amid light electronic trade with U.S. markets closed for the Independence Day holiday. Gold for August delivery was last seen up $3.60 to US$3,346.50 per ounce. The price of the precious metal has remained rangebound since closing at a record $3,452.80 per ounce on June 13.

But West Texas Intermediate oil prices fell for a second day on increasing supply. WTI oil for August delivery was last seen down $0.50 to US$66.50 per barrel, while September Brent crude was down $0.50 to US$68.30.

The Ibovespa reversed early session losses to close 0.2% higher at a fresh 141,264 record on Friday, buoyed by a Supreme Court ruling that suspended both the Executive’s and Congress’s IOF-tax measures, removing a significant fiscal cloud, and by a divergence between cooling activity and central-bank guidance.

May’s PPI plunged 1.29%, and industrial output slipped again under a still-restrictive 15% Selic, yet traders focused on the bank’s pledge that rate cuts will hinge on durable disinflation rather than transient weakness.

Heavyweights Ambev, WEG, Eletrobras, and B3 led the advance, each adding over 0.9%, while exporters braced for July?9th tariff notices from Washington.

Lighter volumes amid the US holiday and the newfound political clarity on IOF were enough to cement the benchmark’s climb, cementing a weekly advance of 3.2%.