12:14 PM EDT, 04/30/2025 (MT Newswires) -- The Toronto Stock Exchange is down 225 points at midday with most sectors lower, following weak GDP data in both Canada and the U.S.

The biggest decliners are miners and energy, down 3.4% and 2.8%, respectively, followed by technology, down 2%.

Defensive sectors telecoms and utilities are higher, up 0.8% and 0.3%, respectively.

On Canadian GDP data, CIBC said the Canadian economy appeared to be "weathering the tariff storm better than the weather itself" during February. GDP fell by 0.2% on the month, driven by sectors that were adversely impacted by worse than normal winter weather. The 0.2% drop in GDP was weaker than the consensus forecast for a flat reading, although it followed a strong 0.4% advance in the prior month.

CIBC added the advance reading for March pointed to a marginal increase of 0.1%, although it said that may be largely driven by a rebound in mining, oil & gas. For Q1 as a whole, today's advance data suggests growth of 1.5% annualized, which is only slightly below the Bank of Canada's MPR projection of 1.8%. However, the growth in Q1 was driven in part by tariff front-running activity early in the year, and momentum clearly faded later in the quarter.

CIBC said: "Given that Q1 growth was partly driven by tariff front-running activity, and that new tariffs have been applied on Canadian goods subsequently, we continue to expect a modest contraction in GDP during the second quarter of the year. That would be closer to the Bank of Canada's more pessimistic scenario 2 projection within the April MPR, and evidence of this within upcoming data should bring a 25bp interest rate cut at the June meeting."

In looking at the key implications of the data, TD Economics said the economic momentum that carried into the early stages of 2025 is starting to wane. With the information TD has at hand, it noted Q1 2025 growth is tracking around 1.5%, a few ticks below the BoC's April MPR projections. "Past this, the outlook is turbulent, with clear downside risks to Canada's economy as the direct impact from tariffs add to the headwinds from plunging sentiment," it added.

TD added: "Policymakers at the BoC have their work cut out for them. The Bank opted to hold the policy rate steady at 2.75% last meeting, despite appearing reasonably downbeat about economic growth prospects highlighted in their scenario analysis. With Canada's housing market visibly strained, and some rollover in labour markets and consumer spending, we'd expect the BoC to cut its policy rate by 25 bps at their next meeting in June."

Meanwhile, RBC said today's US Q1 GDP print gives an idea of the health of the US economy ahead of tariff whiplash and policy uncertainty, adding this starting point was broadly in line with expectations at minus 0.3% quarter over quarter annualized vs. a minus 0.2% consensus, for a weak start to the year. RBC noted the print has some large pre-tariff distortions: a surge in imports drove the trade gap wider and this was only partially offset by a ramp up in inventories.

A surprising upside was that U.S. consumers performed better than expected and services spending seemed to hold up. "As we've discussed, we're monitoring for signs of a slowdown in high income households moving forward and a bleed from soft data into hard data," the bank said.