-- The Toronto Stock Exchange closed lower on Thursday, the first drop in seven sessions, on some profit taking, but also on wariness around continuing geopolitical tensions across the Middle East and lingering concerns around inflation with a recent spike in oil prices seen adding to existing tariff-related pressures on global economies.
The S&P/TSX Composite Index closed down 142.86 points, or 0.4%, to 33,477.71, even as losses were capped with the Battery Metals Index up 4.5%. Losers were led down by Telecom, down near 3.4%, and Info Tech down near 2.1% as stock pickers weigh inflation risks and Fed minutes showed officials are open to rate hikes if inflation stays above target. Tech stocks are sensitive to interest rate changes due to their reliance on high capital spending. Higher interest rates increase borrowing costs, and could curb investment in innovation and expansion.
RBC Economics, in featured analysis on the United States, noted it has been just over one year since 'Liberation Day', when the U.S. administration announced sweeping tariffs on all trade partners to reduce imbalances. But, RBC said, the trade deficit has not narrowed while trade has been diverted.
At present, RBC added, all eyes are focused on a new shock: The conflict in the Middle East, which has sent oil prices soaring to near-2022 highs when Russia invaded Ukraine. "Still," the bank said, "beneath the surface, the ramifications of tariffs are building, and spiking oil prices will add to pre-existing tariff price pressures with both core and headline inflation rising in tandem."
In a separate, related but more positive note for Canadians, RBC noted a rebalancing in travel from this country continues as U.S. cross border trips decline amid Canadian anger stemming from the U.S. targeting of certain industries here for tariffs and by President Trump calling Canada the 51st state .
RBC added a sustained pullback in trips to the United States is increasingly being offset by rising travel to other destinations within Canada as well as abroad. The bank noted travel to the U.S. fell 25.4% in 2025 to 29.1-million trips with weakness persisting into early 2026. Dollars that might have been spent abroad are being recycled domestically with total tourism spending up 1.7% in 2025.
RBC also noted the shift kept Canada as a net exporter of travel services in 2025 as spending stayed closer to home, and that tourism GDP grew 4.8% in Q4, outpacing a broader economy that contracted 0.6%, marking the third consecutive quarter of outperformance.
Of commodities, West Texas Intermediate closed higher Thursday as Iran continues to block the Strait of Hormuz. WTI did fall off session highs after Israel said it will begin talks with Lebanon. Iran had maintained a two-week ceasefire agreement reached with the U.S. did include a pledge to halt Israeli attacks on Lebanon. WTI crude oil for May delivery closed up $3.46 to settle at US$97.87 per barrel after touching US$102.70 earlier. June Brent oil was last seen up $0.96 to US$95.71.
Gold traded higher by midafternoon Thursday as the dollar weakened after the United States reported a key inflation measure rose, and while the U.S. and Iran argued over the terms of their two-week ceasefire deal. Gold for May delivery was up $36.10 to US$4,813.30 per ounce.