Canada’s main stock exchange slipped on Friday as investor fears about the financial health of smaller U.S. banks continued for a second day.
Concerns have been rising after the collapses of American auto parts maker First Brands and car dealer TriColor earlier this year. Traders now fear that other regional banks could also face credit problems.
By midday, the S&P/TSX 60 index futures had dropped 13 points, or 0.77%, while the broader S&P/TSX composite index was down 351 points, or 1.16%, at 30,106.91. On Thursday, the index had already fallen 0.6%, pulling back from an all-time high reached earlier in the week. Gains in gold and metal mining stocks helped limit the decline, but losses in financial and energy shares dragged the market lower.
U.S. stocks were trading unevenly on Friday. The Dow Jones inched up 25 points, or 0.1%, while the S&P 500 fell 25 points, or 0.4%, and the Nasdaq lost 115 points, or 0.5%.
On Thursday, all three major indexes had also finished lower after Zions Bancorporation and Western Alliance Bancorporation revealed loan losses linked to possible fraud. That news reignited concerns about weak credit oversight among smaller U.S. lenders.
The Dow had dropped more than 300 points, or 0.7%, while the S&P 500 and Nasdaq declined 0.6% and 0.5%, respectively.
Other factors, including renewed trade tensions between the U.S. and China also hurt investor sentiment. Former President Donald Trump announced plans to impose an additional 100% tariff on all Chinese imports starting next month in response to China’s restrictions on rare earth exports.
Meanwhile, the ongoing U.S. government shutdown, now in its third week, is creating further uncertainty by delaying economic data releases and raising fears of slower near-term growth.
Investors are now watching earnings reports from several regional banks, including State Street and Comerica, to gauge how the sector is handling current challenges.
Fifth Third Bancorp reported results that beat expectations, helped by lower deposit costs that boosted its interest income. Many regional lenders, including Fifth Third, have been trying to reduce deposit expenses following the Fed’s recent interest rate cuts.
American Express raised the lower end of its 2025 profit and revenue outlook, saying its wealthier customer base remains resilient despite economic and political uncertainty.
Oracle offered an upbeat long-term forecast, saying strong demand for artificial intelligence services is driving its growth. Meanwhile, railroad company CSX posted a big profit drop from last year due to a one-time charge, but adjusted earnings still slightly beat Wall Street estimates.
Micron Technology, according to Reuters, plans to stop selling server chips to Chinese data centers following a government ban issued in 2023.
Oil prices slipped after news that U.S. President Donald Trump and Russian President Vladimir Putin plan to meet in Budapest within two weeks to discuss ending the Ukraine war. Brent crude fell 0.4% to $60.83 a barrel, while U.S. West Texas Intermediate dropped 0.3% to $57.31. Both were down about 3% for the week, their lowest levels since early May.
Gold, on the other hand, remained near record highs. Spot gold edged up 0.1% to $4,329.85 per ounce after earlier touching a new peak of $4,379.29. U.S. gold futures rose 0.9% to $4,344.71.
The precious metal is on track for its ninth straight weekly gain and has extended its record-breaking rally for five sessions in a row, supported by expectations of a Fed rate cut and growing geopolitical worries.
