04:18 PM EDT, 04/03/2025 (MT Newswires) -- The Toronto Stock Exchange closed sharply lower on Thursday, tumbling along with all North America bourses after U.S. President Donald Trump's imposed substantial new tariffs on the country's trading partners, while some market watchers expect even worse to come amid fears of a global recession.

The S&P/TSX Composite Index closed down 971.41, or 3.8% to close at 24,335.77, under the 4% drop for the Dow Jones Industrial Index and the Nasdaq Composite Index's 6% fall. Among sectors, Technology, down 9.5%, is the biggest decliner, followed by Base Metals, down 8.9%. Energy is also sharply lower, down 7.07%.

Rosenberg Research and UBS were among those warning U.S. stock markets have not, as of today, priced in a global trade war and until it they do further losses are likely, which could have a big negative knock on impact on the Canadian stock market.

Rosenberg Research today said sentiment in U.S. equities, "though off the highs, still remains historically elevated". According to the research, equities have "not fully priced in a global trade war and the resulting impact on growth". Its models make further defensive adjustments in light of current risk-off sentiment. It trimmed exposure to high valuation areas and those that are subjected to tariffs, while adding to segments that benefit from falling yields and are defensive in nature.

UBS expects further de-risking of U.S. equity exposure in the near term, and volatility to stay contained, with one caveat. UBS said its Chief Global Equity Strategist suggests there are "potentially good reasons" for tariffs to be moderated from the April 2 announcement, which could create a tactical buying opportunity. In the interim, UBS sees scope for the S&P 500 to test 5,300 before the market low if tariffs are not moderated. "In this instance," it said, "we would expect to see a continuation of investors de-risking US equity exposure, with rotation into bonds driving a negative equity/bond correlation environment. We suggested earlier this week that absent a recession, volatility could remain contained as market fragility had significantly diminished -- we are seeing this play out (for now)."

If tariffs are not moderated, UBS expects the probability of U.S. stocks entering a bear market to move higher. UBS noted 2025 earnings now risk declining much lower than 6-7% earnings growth it thought they would stabilize at, down from near 13% at the start of the year, with risk of turning negative. UBS said its U.S. economists flag the risk of a technical recession, though not its base case at present.

Meantime, Canada has countered U.S. moves by launching its own 25% tariffs on all vehicles imported from the U.S. that are not compliant with CUSMA, the North American free trade agreement, with vehicle parts exempt.

Of commodities, gold traded lower late -afternoon on Thursday, falling off a day-prior record high, as traders moved to add liquidity as stock markets fell. Gold for June delivery was last seen down $38.80 to US$3,127.40 per ounce, after rising to a record $3,166.20 Wednesday.

Also, West Texas Intermediate crude oil plunged on Thursday amid broad market chaos following the imposition of widespread tariffs by the Trump Administration on U.S. trading partners and a decision by OPEC+ to add in May more new supply than expected as it speeds the return of 2.2-million barrels of production cuts to market. WTI oil for May delivery closed down $4.76 to settle at US$66.95 per barrel, while June Brent crude was last seen down $4.93 to US$70.02.