04:24 PM EDT, 10/09/2025 (MT Newswires) -- The Toronto Stock Exchange dived Thursday on profit taking after a series of recent record closes, on deflated commodity prices while some market watchers, including Scotia Economics, expect that U.S. tariffs will continue to weigh on growth for the foreseeable future.

The S&P/TSX Composite closed down 232 points, or 0.75%, to 30,269.98, although sectors were mixed. Industrials was the biggest loser, down 1%, while no other sector eased by as much as 0.5%. Among gainers, the Battery Metals Index was up 4.75% and Telecom up 1.2%

Related to Industrials, Industry Minister Melanie Joly on Thursday detailed Canada's updated industrial strategy and how the governing Liberals plan to bolster key sectors, including steel, aluminum, lumber and auto, all of which are struggling under U.S. President Donald Trump's tariffs.

In other sector news, a senior official at the Bank of Canada, senior deputy governor Carolyn Roger, called for more competition in the banking sector to better serve Canadians and the economy in a speech at the Canadian Club in Toronto on Thursday morning.

On trade matters, RBC Economics noted the economic impact of U.S. policy has not only had a larger impact on trade-sensitive sectors and regions, concentrated in the manufacturing sector to date, but also across the income and wealth distribution of households. In Canada, RBC said, the household wealth gap widened during Q2 as the housing market's weaker performance limited gains for the least wealthy households. Meanwhile, it added, wealthier households saw larger benefits from the strong rebound in the equity markets following a weak Q1.

With a deeper look in to trade, Scotia Economics published a 'Monthly Trade Publication on Canada-US Trade' for August 2025.

In it Scotia noted Canada's goods exports fell back again in August, after having improved slightly in the prior three months following the large drop in April. Exports fell by 3.0% and imports increased by 0.9%, lifting the goods trade deficit to $6.3 billion. The export categories with the largest declines in August were metals, led by unwrought gold, industrial machinery and parts, forestry products, and motor vehicles and parts.

On a year over year basis, Scotia noted, Canadian goods exports were down 5.5% in August, and down 5.2% on average over the last three months (Jun-Aug), with the largest percentage declines in industrial chemicals, metals, energy products, and forestry products. Imports were up 1.7% in August, and up 1.5% on average since June. It also noted the share of Canadian exports bound for the United States declined from 76% in 2024 to 72% in August, driven by a marked decline in exports to the U.S. in 2025 and only modest growth in exports to other countries. Exports to the U.S. were down 3.4% m/m and 8.0% y/y. Exports to other countries fell 2.0% m/m but were up 1.8% y/y.

Scotia noted Canada's trade in services with the U.S. is much smaller than trade in goods, but has been much more stable. It has even improved from a small deficit at the end of 2024 to a surplus of $0.3 billion as of August, thanks to further growth in commercial services exports and a 10% decline in travel imports (i.e., international vacations).

Meanwhile, Scotia noted, after widening drastically early in the year on tariff-front-running imports, the U.S. trade deficit has returned to roughly its 2024 level. However, there have been compositional changes to U.S. trade flows. As of July, U.S. imports were running significantly lower year over year from Canada, down 10%, the E.U., down 11%, and China, down 35%, and higher from Mexico, up 11%, and the rest of the world, up 21%. Scotia also noted U.S. customs data show the proportion of Canadian goods imported into the United States facing tariffs has stabilized at near 10%, down from 20%, due to the increased incentive for firms to submit CUSMA compliance paperwork.

Scotia said: "While uncertainty and effective tariff rates have come down from the peaks of the spring, they remain elevated and continue to weigh on growth around the world. In addition, new U.S. tariff announcements on pharmaceuticals, furniture, and heavy trucks demonstrate the continued fluidity of the global trade landscape."

It also said: "Canada continues to benefit from a low effective tariff rate on exports to the U.S. (4.6% is our estimate) thanks to most of our trade continuing on a free-trade basis under CUSMA. However, most of the Canadian industries impacted by the sectoral tariffs have seen clear export declines -- especially steel, aluminum, and forestry products."

Scotia added: "Some relief for Canada from some of the sectoral tariffs, as is apparently under discussion, would provide a welcome boost to these industries, but it is difficult to be very confident that the relief would be permanently maintained and/or not offset by new tariffs. As a result, we expect that U.S. tariffs will continue to weigh on growth for the foreseeable future."

Of commodities today, gold had moved down from a record high by midafternoon Thursday as traders took profits while the dollar rose to a two-month high. Gold for December delivery was last seen down $77.00 to US$3,993.50 per ounce.

Also, West Texas Intermediate crude oil closed lower after a ceasefire agreement between Israel and Hamas reduced tensions in the Middle East, lowering the geopolitical risk premium on the commodity. WTI crude oil for November delivery closed down $1.04 to settle at $61.51 per barrel, while December Brent oil was last seen down $1.13 to $65.15.