The Toronto Stock Exchange fell from a record close Wednesday on profit taking, but also as Canadian investors come to terms with the fact the country is in a 'technical' recession just as the United States ramps us its demands with trade talks involving the two nations set to resume soon.
The S&PTSX Composite Index closed down 367.92 points, or 1.05%, to 34,801.54, with most sectors lower, led by Info Tech, down near 3.5%. The Battery Metals Index led gainers, up by near 3%.
Energy also rose, up by 1.2% as West Texas Intermediate crude oil rose for a third day with the ceasefire between Iran and the United States appearing to fracture after the two sides exchanged strikes, lowering hopes for a deal to end the war and reopen the Strait of Hormuz. WTI oil for July delivery closed up US$2.26 to settle at US$96.02 per barrel, while August Brent oil was up US$1.88 to US$97.88.
But Base Metals lost 3.2%, not helped by gold trading lower as the dollar rose to a two-month high after oil prices rose following fresh hostilities between the U.S. and Iran, renewing worries energy inflation will force central banks to lift interest rates. Gold for July delivery was down US$53.80 to US$4,466.10 an ounce.
Still, Rosenberg Research has increased its exposure to gold exchange-traded (GLD) and gold miners (GDX). "We made several adjustments to the Rosie Model Portfolio to put into action some of the constructive themes we have been writing about recently, while also taking profits and rebalancing some of our strongest performers." it said on Wednesday.
Rosenberg Research continues to see structural support for gold prices. Which, it said, should support the profit outlook for gold miners. After a period of weak, range-bound performance driven by war-related market conditions, Rosenberg Research sees this as a good point to rebuild exposure. Following the adjustment, gold (GLD) has a 5.7% weight in the portfolio, while gold miners (GLDX) have a 5.8% weight, it noted.
On the economics front, Canada's economy shrank in the last two quarters, which meets the definition of a 'technical recession'. But some economists say that label is misleading, while others argue that the distinction doesn't really matter, CTV News is reporting. "Technically, we are in a recession," Colin Mang, assistant professor of economics at McMaster University, told CTV News Channel on Tuesday. "We've had two quarters where overall spending in the economy dropped, but to put things into context, the decline from the fourth quarter of 2025 to the first quarter of 2026 was only about $1 million. That represents 0.03% of our total $3.2 trillion economy."
CTV noted Mang's comments came after Statistics Canada released its latest gross domestic product (GDP) data on Friday, which found that the slight first-quarter GDP drop followed a dip of 1% in the fourth quarter of last year, a number StatCan revised down. According to StatCan, the Canadian economy has seen negative real GDP growth in three of the last four quarters.
On top of that, Canada is already on the back foot ahead of trade talks with the United States resuming. Prime Minister Mark Carney said Wednesday his Liberal government will soon introduce legislation on forced labor in supply chains after the Trump administration proposed a 10% additional tariff on Canada and other countries following an investigation into the issue.
Trade discussions between the two countries. will continue ahead of the July 1 CUSMA review deadline, but they are likely to extend beyond that date as the nations work through unresolved trade issues and tariff disputes.