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Market Turmoil: S&P 500 Enters Correction Amid Escalating Trade War

                                                                 The stock market faced a sharp downturn on Thursday, with the S&P 500 officially entering correction territory. The index fell 1.4%, marking a 10% decline from its recent high. The Dow Jones Industrial Average dropped 1.3%, while the tech-heavy Nasdaq plummeted nearly 2%. This market turbulence comes as trade tensions escalate. The European Union's retaliatory tariffs on U.S. goods, including a 50% tax on American whiskey, prompted the U.S. administration to threaten a 200% tariff on European wines and spirits. These developments have left investors on edge, fearing the economic repercussions of a prolonged trade war. Adding to the uncertainty, debates over a stop-gap spending bill to prevent a government shutdown have further ...
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Canadian Dollar Soars as U.S. Tariffs Are Shelved

 

The Canadian dollar surged to a near five-week high against its U.S. counterpart on Monday as the threat of immediate U.S. trade tariffs diminished. The loonie was trading 1.1% higher at 1.4325 per U.S. dollar, or 69.81 U.S. cents, after touching its strongest intraday level since December 17 at 1.4262.

The relief rally came after newly inaugurated U.S. President Donald Trump announced he would not impose a 25% tariff on imports from Canada and Mexico on his first day in office. Instead, Trump directed federal agencies to evaluate U.S. trade relationships with these countries. This decision alleviated market concerns and boosted investor confidence.

Additionally, a Bank of Canada survey revealed that firms are beginning to anticipate improved economic activity, further supporting the loonie's rise. However, Canadian businesses remain cautious about the potential impact of future U.S. trade policies.

With inflation expectations normalizing, the Bank of Canada may consider lowering interest rates to stimulate economic growth and reduce unemployment.




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