04:26 PM EST, 11/17/2025 (MT Newswires) -- The Toronto Stock Exchange closed lower on Monday with the Bank of Canada seen moving back to the sidelines on rates after today's October inflation update, while the Information Technology sector led decliners amid early nerves across North America ahead of Nvidia (NVDA) reporting results after the bell Wednesday, providing market watchers with clues on the state of play in artificial intelligence.

The resources-heavy S&P/TSX Composite Index closed down 250.25 points, or 0.8%, to 30,076.21, with most sectors lower. This comes after the TSX had steadied Friday following Thursday's sell off, which came, like today, on concerns about valuations and outlook for major telecom companies. Among sectors, Info Tech was down 2.1%, Base Metals down 1.4% and Industrials down 1.1%. On the flip side, Telecoms was up near 0.5% while Health Care and Utilities were both modestly higher.

Investors concerns over the possibility of another Canadian federal election in 2026, just months after the last one, came closer to being taken off the table as Elizabeth May, Green Party Leader and the party's sole member of Parliament, said she will vote in favor of the Liberals' budget for 2025 after she said she had got commitments from PM Mark Carney that Canada will meet its targets under The Paris Agreement, a legally binding international treaty on climate change. The governing minority Liberals appear to need just one more vote from outside the party, and/or abstentions, to avoid a defeat that could trigger another election.

On today's inflation data, National Bank noted Canada's Consumer Price Index (CPI) rose 0.24% in October from the prior month in non-seasonally adjusted terms, in line with consensus expectations. In seasonally adjusted terms, prices rose 0.12% in October following a 0.43% monthly rise in September. Five of the eight major categories posted price increases in the month. In order of magnitude, gains were seen in shelter, up 0.64%, household operations, up 0.45%, recreation and reading, up 0.39%, alcohol and tobacco, up 0.15% and health/personal care, up 0.13%. On the flip side, clothing and footwear, down 0.43%, and transportation, down 0.06% registered monthly declines. The price of food remained unchanged in the month.

On an annual basis, National Bank noted, headline inflation declined two ticks in October to 2.2%, one tick above the median forecast. April's removal of the carbon tax continues to artificially depress the headline measure and excluding the impact of indirect taxes, inflation is running at 2.7% vs. 2.9% in September.

On core measures, National noted, CPI-Trim was up 3%, in line with consensus, while CPI-Median, up 2.9%, was a tick below that mark. Meanwhile, CPI excluding food, energy and indirect taxes rose 2.7%, up from 2.4% in September, while CPI excluding the most volatile items rose 2.9%, up from 2.8%.

Still, National Bank said given the central bank has once again changed its stance on core inflation measures, stating that observers were placing too much importance on the CPI-Trim and CPI-Median, it also tracking the CPIX and CPIXFET to assess the evolution of underlying inflation. National noted that the average of these four measures rose by 0.25% in October, at an annualized rate of 3.0%. It said this pace is also essentially the same as seen over the past three months and over the past year and is substantially above the midpoint of the BoC's target range of 1 to 3%.

As far as diffusion is concerned, National Bank said the situation is not much better, with 33 components rising above the central bank's target over the last three months, i.e., above the 28 observed during a period of inflation on target (1999-2019). In its latest interest rate decision, National noted, the BoC stated it considered it had done enough with this additional 50 basis point rate cut this fall. National Bank said October's employment data, which showed a decline in the unemployment rate and an acceleration in wages, combined with today's inflation figures, will reinforce its conviction. "We continue to view the Canadian economy and labour market as being in excess supply, and the outlook is not reassuring without a trade agreement with the United States, but inflationary pressures are persisting longer than normal. This limits the BoC's room for maneuvering to give the economy some relief," it added.

According to David Doyle, head of economics at Macquarie Group, underlying measures are likely to moderate further ahead. Doyle said the output gap is "sizeable", but may begin to close in 2026 amidst negative population growth, while shelter disinflation has further to run driven by weak market rents, soft housing activity, and challenged home prices. Base effects suggest YoY measures are likely to moderate in coming months, he added.

Doyle said, "We continue to believe the BoC has completed its rate cutting cycle at its last meeting. As we highlighted after the last meeting, lower potential output is likely to be a constraint on further easing. This was reinforced by the updated federal government immigration levels plan that implies negative population growth during 2026 and 2027."

Of commodities, gold traded lower by midafternoon Monday, down for a third-straight session, amid dimming hopes for a December interest-rate cut from the Federal Reserve and a stronger dollar. Gold for December delivery was down $23.40 to US$4,070.80 per ounce.

Also, West Texas Intermediate crude oil closed lower, remaining firmly rangebound amid high supply and reports Russia has resumed exports from its Novorossiysk port in the Black Sea following Ukrainian attacks on the facility last week. WTI crude oil for December delivery closed down $0.18 to settle at US$59.91 per barrel, while January Brent oil was last seen down $0.13 to US$64.26.