04:24 PM EDT, 06/17/2025 (MT Newswires) -- The Toronto Stock Exchange closed with a modest loss on Tuesday as investors monitor developments on global trade at the G7 Summit in Alberta, even following the early departure U.S. President Donald Trump and events in the Middle East as Israel and Iran trade attacks for a fifth day.

Stock pickers are also likely digesting today's commentary from the Bank of Canada around interest rates, with more expected to come on this from Governor Tiff Macklem himself tomorrow.

The S&P/TSX Composite Index closed down 27.22 points to 26,541.39, within a 100 points of the record close of 26,615.75 set on on June 12. Among sectors, most were lower, with Health Care easily down the most at 2.3%. Energy was the biggest gainer, up 1.7%.

Within the Energy sector, MEG Energy ( MEGEF ) closed up 0.9% even as an expert said the oil-sands producer may struggle to find another buyer after the company urged its shareholders to reject a takeover proposal from rival Strathcona Resources ( STHRF ) on Monday. "The 'go it alone' approach seems very implausible because the market didn't like that approach before the offer," Cole Smead, chief executive and portfolio manager at Smead Capital Management, told BNN Bloomberg in a Tuesday interview.

"(Investors) were effectively trading MEG like they had something wrong ... their capital allocation overall we don't disagree with and we think the management did a really good job. The difference though is they don't have an anchor shareholder, a large capital allocator like Adam Waterous."

National Bank of Canada in its Monthly Economic Monitor for June said given the recent "lull" in global trade tensions it has revised its global GDP growth forecasts slightly upward for this year to 2.9% from 2.8%, and to 3.0% from $2.9% in 2026, reflecting a slightly more buoyant growth trajectory in the United States and the eurozone.

"The last few weeks have been a little less eventful on the international trade front, but that hasn't stopped protectionist policies from having a significant impact on the global economy,: the bank noted. "Fearing that they will have to pay more for their inputs in the future, many U.S. companies indeed have chosen to bring forward their orders from abroad. This has not only helped to boost global manufacturing output, but has also led to the strongest annual increase in trade volumes since 2011, excluding the post-pandemic rebound."

However, National Bank emphasized that the risks to this scenario remain tilted to the downside. "Among these, two seem particularly important to us. The first relates to a possible resurgence of trade tensions. The second concerns a potential escalation of tensions in the Middle East, which would lead to a significant rise in oil prices."

Of commodities today, West Texas Intermediate crude oil closed up 4.3% on concerns the conflict between Israel and Iran could disrupt oil supply from the Persian Gulf even as the International Energy Agency (IEA) said global inventories are continuing to rise. WTI oil for July delivery closed up $3.07 to settle at US$74.84 per barrel, the highest since Jan.21, while August Brent crude was last seen up $3.38 to US$76.61.

But gold futures were down for a second day late afternoon on Tuesday as the dollar rose after U.S. retail sales fell more than expected last month, while the Federal Reserve's policy committee begins its two-day meeting that is expected to leave interest rates unchanged. Gold for August delivery was last seen down $13.30 to US$3,404.00 per ounce.

Bank of Canada officials debated cutting rates by 25 basis points in June, but were ultimately dissuaded by the "firmness" in economic activity and elevated inflation, noted Tiago Figueiredo over at Desjardins on Tuesday after the release of the BoC's Summary of Deliberations, a summary of monetary policy deliberations by the Governing Council for the policy decision that was announced two weeks earlier.

The Governing Council, Figueiredo noted, "didn't close the door to further rate cuts". He said: "While they will likely need to be see some progress on core inflation, the possibility of a trade deal with the US could leave central bankers more forward looking at their upcoming rate decision. Assuming the economy continues to operate with considerable slack, a more forward looking reaction function would allow policymakers to look through some of the stickiness in the core inflation measures."

Investors will look for more details around the BoC's thinking on rates tomorrow when Governor Macklem speaks tomorrow to the St. John's Board of Trade, Newfoundland and Labrador.