Canada's main stock index gained nearly 200 points, led by the tech and industrial sectors.
The S&P/TSX composite index rose 193.18 points to close at 26,073.13.
One of the big gainers was ATS Corp., whose shares surged more than 20 per cent after it announced a US$135 million settlement with an electric vehicle customer over outstanding payments.
Meanwhile, Ivanhoe Mines Ltd. dropped more than 16 per cent on the TSX as seismic activity continued to halt underground operations at a copper mine in the Democratic Republic of Congo.
U.S. stock and commodities markets were closed for the Memorial Day holiday.
The Canadian dollar closed at 72.83 cents US compared with 72.70 cents US on Friday.
Kevin Burkett, portfolio manager at Victoria-based Burkett Asset Management, said investors are looking ahead to the Bank of Canada's next interest rate announcement set for June 4.
Odds are betting the central bank will hold rates steady rather than cut them, he said.
"I think the market's generally come around to the view that in Canada we're going to have a really hard time cutting interest rates if the U.S. isn't themselves cutting rates."
Investors on both sides of the border are also continuing to track the "erratic headlines" coming out of the White House, Burkett said.
On Monday, U.S. President Donald Trump said he would delay a threatened 50 per cent tariff of European goods until July 9. Stocks fell on Friday after Trump said talks with the European Union were "going nowhere" and that levy would take effect on June 1.
"I think overall risks remain very high that he implements these tariffs and that they have economic consequences that maybe he or his advisers underestimate," Burkett said.
He added he's encouraged by recent Canadian data that suggests consumers are "a little less freaked out" than they were a month ago.
"But I think it's high chance that Trump continues the incendiary rhetoric of the past three months," he said.
To contend with the volatility, Burkett has been focused on investments geared toward consumers "needs" versus "wants."
That means consumer staples like Loblaw Cos. Ltd. and Dollarama Inc. are safer bets than names that rely more on discretionary spending, like BRP or Cineplex Inc., he said.
This report by The Canadian Press was first published May 26, 2025.
Companies in this story: (TSX: GSPTSE, TSX: CADUSD, TSX: ATS, TSX: IVN, TSX: DOO, TSX: DOL, TSX: L, TSX: CGX)
Lauren Krugel, The Canadian Press
