04:22 PM EDT, 06/18/2026 (MT Newswires) -- The Toronto Stock Exchange edged lower on Thursday as weakness in commodity-linked sectors, including energy, battery metals and base metals, outweighed gains in financial and industrial stocks, while investors assessed fresh economic data and the outlook for Bank of Canada monetary policy.

The S&P/TSX Composite Index closed down 155.85 points, or 0.44%, at 34,969.26 with sector finishing mixed.

Health Care led gainers, up 2.27%, while Financial, Industrials, and Utilities, up 0.50%, 0.92%, and 0.40%, respectively. Battery Metals Index led decliners, down 2.90%, with Information and Technology, down 2.51%, Telecom, down 0.03%, Energy, down 1.87%, and Base Metals, down 1.31%.

In commodities, gold traded lower Thursday as the dollar rose to its highest level in more than a year after the US Federal Reserve left interest rates unchanged at the conclusion of its two-day policy meeting on Wednesday. The precious metal, which has an inverse relationship with the greenback, was down US$135.90 to US$4,245.70 per ounce.

Meanwhile, the West Texas Intermediate (WTI) crude closed lower Thursday after Iran and the US signed a preliminary ceasefire deal that promises to reopen the Strait of Hormuz, freeing supply from Iran and the Persian Gulf nations that has been blocked since the war started on Feb. 28. WTI crude oil for July delivery closed down less than 0.1% to settle at US$76.60 per barrel, rising off session lows of US$73.58, while August Brent oil was up by less than 0.1% to US$79.27.

Beyond commodity markets, investors also weighed the domestic economic outlook, with TD Economics arguing that subdued inflation pressures gives the Bank of Canada (BoC) room to remain on the sidelines and keep interest rates unchanged.

The BoC is expected to remain on hold through the rest of the year, supported by an economy that continues to operate below capacity and an inflation backdrop that remains relatively contained, TD said Thursday. Unlike the United States, underlying inflation trends in Canada remain "well behaved", according to the bank. The BoC's preferred core inflation measures have averaged around 1.5% annualized over the past six months, holding at below target and suggesting limited underlying inflation momentum.

TD also predicted that Canada's economy may see growth momentum return in the second half of the year after posting two consecutive quarterly contractions that raised recession worries. A large part of the Q1 0.1% year-over-year contraction was the pullback in government spending, which the bank doesn't expect to continue, it said in a report on Thursday. Household spending is also projected to continue after rising 1.5% quarter-over-quarter in the first three months.

"Looking ahead, we expect the economy to continue to gradually regain some momentum ... international trade data also supports the case for a rebound in April," TD said. Job gains in May reversed a large part of the losses posted earlier in the year and reduced the unemployment rate to 6.6%, the lender added.

On the economic front, data released Thursday showed Canadian producer prices continued to climb in May, reflecting higher energy-related costs and ongoing disruptions to global supply chains.

Prices of products manufactured in Canada, as measured by the Industrial Product Price Index (IPPI), were up 1.2% month over month in May and increased 13.6% year over year, said the country's statistical agency on Thursday. The IPPI's May rise marked the fifth consecutive monthly increase. Disruptions to shipping through the Strait of Hormuz continued to affect global commodity markets in the month, reflecting impacts on crude oil costs and supply chains since March, noted Statistics Canada in a statement.

However, prices of raw materials purchased by manufacturers operating in Canada, as measured by the Raw Materials Price Index, increased 0.7% month over month and rose 33.4% year over year, said the Ottawa-based agency.

Separate data released Thursday pointed to continued caution among Canadian businesses, with small-business confidence remaining in pessimistic territory for a second consecutive month.

Small business confidence in Canada saw virtually no change in June, with the index remaining below the 50-point mark that for a second month in a row, said the Canadian Federation of Independent Business Barometer published on Thursday. A reading below 50 means business owners are expecting a weaker performance over the next three or 12 months.

Fuel remains the top cost constraint for 66% of small businesses, while weak demand continues to weigh on more than half, or 53%, of the firms, CFIB said.

Additionally, a new analysis from Scotiabank Economics suggested Canada's tighter immigration rules are having a pronounced impact on the international student population, with permit-holder numbers falling below government targets. The bank said the total stock of study permit and post-graduation work permit holders has dropped from a peak of more than 1 million in mid-2024 to just under 620,000 currently, reflecting stricter immigration measures.

"While the decline in the number of temporary work permit holders has been gradual since the introduction of annual temporary permit holder arrival caps, the pace at which the international student population has declined has been rapid, to say the least," senior economic analyst Anthony Bambokian said in the note.