The S&P/TSX Composite Index closed higher on Monday as gains in health care, telecommunications and other sectors lifted the benchmark, while investors weighed escalating Canada-US trade tensions and lower oil prices.
The index closed up 93.89 points, or 0.3%, to 36,714.12, with most sectors up. Health Care led gainers, up 1.1%, while Telecom was up 0.7%. Industrials led decliners, down 1.1%.
The Battery Metals Index, which includes companies listed both on the TSX and TSX Venture Exchange, jumped 4.4%.
In commodities, West Texas Intermediate (WTI) and Brent crude fell on Monday as investors assessed the impact of new US sanctions targeting Iran and its trading partners. Prices remained under pressure despite continued supply concerns in the Middle East, with shipping through the Strait of Hormuz still sharply below pre-conflict levels. October WTI crude oil contract settled down $2.05, or 2.4%, at $85.01 per barrel, while October Brent oil was last seen down $2.44, or 2.6%, at $91.95 per barrel.
Meanwhile, December Comex gold futures gained 0.6%, or $28.80, to $4,709.40 per ounce at last look.
In currencies, the US dollar edged higher 0.6% against the Canadian dollar, with USD/CAD at 1.3848 at last look.
In economic news, Prime Minister Mark Carney on Monday announced the investment of C$11 billion to build six icebreakers aimed at keeping key trade routes open and expanding access to international markets. The icebreakers will help cargo vessels navigate ice-covered sections and facilitate the shipment of about C$40 billion worth of Canadian goods annually.
The investment comes as Canada seeks to diversify exports away from the United States and this program is seen as part of Canada's broader strategy to strengthen trade infrastructure following the collapse of bilateral trade talks late Friday.
Saturday's new US tariffs on specific goods worth C$28 billion cover around 5% of Canadian exports to the US and raise the weighted average effective tariff on Canadian imports to 7.5 percentage points from about five points, hitting the country's economic growth, according to BMO Capital Markets in a Monday note.
However, the heightened uncertainty strengthens the Bank of Canada's case for keeping interest rates on hold, according to BMO Capital Markets senior economists Robert Kavcic and Jennifer Lee.
Meanwhile, RBC Economics said in a Saturday note, "We do not expect the broader macroeconomic impact of these new tariffs to be enough to push the Bank of Canada to seriously consider pivoting to interest rate cuts."