Donald Trump’s decisive win in the U.S. presidential election sent U.S. stocks surging Wednesday. But for markets outside the United States, where Trump ran an aggressive America-first campaign, the picture was more muted. 

Canada’s S&P/TSX Composite index, which tracks the largest companies on the Toronto Stock Exchange, opened up just 0.4 per cent Wednesday. That’s compared to record gains on the U.S. blue-chip index Dow Jones Industrial Average, along with a two per cent increase on both the S&P 500 and the tech-heavy Nasdaq Wednesday morning. 

“Most international markets are flat-to-down,” said Jason Daw, head of North American rates strategy at RBC Capital Markets. “The reaction … is consistent with conventional wisdom that any net benefits of policies under a Trump administration will accrue to the U.S. and are neutral to negative for non-U.S. markets.” 

The loonie dips: The Canadian dollar fell about 0.8 per cent, dropping to about 72 cents U.S. At an Economic Club of Canada event in Toronto on Wednesday, Bank of Canada senior deputy governor Carolyn Rogers noted that there’s “been a bit of worry recently about divergence” with the loonie’s value relative to the U.S. dollar. Canada’s floating exchange rate, however, serves as a buffer for price changes against the greenback, Rogers added, limiting how much the currencies can diverge. 

Daw noted that while the loonie has trailed the U.S. dollar, it has far outperformed the euro and the Mexican peso, “which probably reflects optimism that across the board U.S. tariffs are unlikely to be applied to Canada.” 

Clean energy tumbles: Trump has threatened to rescind unspent money from the Inflation Reduction Act, a key industrial program introduced under President Joe Biden to support clean energy projects. That would hurt Canadian companies that have benefited from the green-industry incentives and the superpower’s increasing demand for clean energy. 

“A lot of Canadian oil and gas and other energy [companies] have been investing like crazy in the United States because they can get [IRA] money,” said Heather Exner-Pirot, special adviser at the Business Council of Canada. “If Trump comes in and repeals some or all of the IRA, that will hurt their business case in the United States.”

Canadian Solar’s share price plummeted more than 20 per cent on the Nasdaq Wednesday afternoon. Quebec’s Boralex, which builds and operates renewable energy facilities, declined nearly five per cent, while Toronto-based Northland Power dropped almost seven per cent. The share price for Brookfield Renewable Partners, a Toronto-based company that owns assets in the clean energy space, was down 5.3 per cent. Clean energy stocks in Europe and the U.S. also fell.

Rebecca Teltscher, portfolio manager of Toronto-based Newhaven Asset Management, said that while Canadian clean energy stocks may suffer in the short term, market demand will eventually supersede Trump’s policies. “At the end of the day, we need new power,” she said. “These projects are going to have to go through.” 

Big bond yields: Trump’s plans to cut taxes and increase import tariffs are widely expected to exacerbate inflation in the U.S. That, in turn, could keep interest rates high. “Because of that, now we have bonds that are selling off,” sending yields surging, said Teltscher. While inflation and interest rates in Canada often mirror the U.S., Teltscher said that may not happen in this case. “Canada’s environment right now is much weaker,” she said. “The consumer is a lot more strapped in Canada than in the U.S. In terms of the Bank of Canada’s easing policy, I don’t think that will change so much with regards to the presidency.” 

‘Ignore the noise’: Markets tend to favour Republican administrations, said Teltscher. James Thorne, chief market strategist at Toronto-based investment manager Wellington-Altus, said Trump could be good for investors. “This isn’t about Trump’s personality,” said Thorne, adding that he thinks the president-elect’s promises to cut government spending will counteract any deficit Trump’s tax cuts would create. “Trump is going to implement a pro-growth, deregulation policy, and embrace crypto and cut government inefficiency,” he said. “Invest accordingly and ignore the noise.” 

With files from Aimée Look and Jesse Snyder