12:24 PM EDT, 04/07/2025 (MT Newswires) -- The Toronto Stock Exchange is down 540 points at midday in volatile trading, as traders try to assess the impact of U.S. President Donald Trump's tariffs. The administration is not showing any signs of backing down, and President Trump on Monday threatened additional tariffs on China.

All sectors are lower. Healthcare, down 4.3% is the biggest decliner, followed by energy stocks, and financials, down 3.3% and 2.8%, respectively.

The magnitude of the announced tariffs will likely serve as a headwind to economic growth in the U.S., notes Edward Jones in its weekly market wrap. Tariffs can pressure corporate profit margins through higher input costs. Consumer-spending data has already shown signs of slowing in the first months of 2025, as the uncertain policy backdrop has weighed on sentiment, analyst Brock Weimer writes. Additionally, retaliatory measures, such as those taken by China and Canada, can weigh on activity in U.S. businesses that rely on exports to drive sales.

"The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession," JPMorgan CEO Jamie Dimon wrote in his annual letter to shareholders Monday. "Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth."

Two reports from the Bank of Canada also pointed to declining business and consumer sentiment in Canada, in the first quarter. The business outlook survey showed that 32% of firms are planning with the assumption that a recession will occur in Canada over the coming year, up from 15% over the past two quarters.

The Canadian survey of consumer expectations noted higher concerns about job security because of the trade conflict.

The surveys were done before President Trump's reciprocal tariff announcement last week.