04:20 PM EDT, 05/29/2025 (MT Newswires) -- The Toronto Stock Exchange was down for only the second time in 17 sessions on Thursday, as investors took profits after it posted record closing highs on each of the prior three sessions, but losses may have been limited on the prospect of "more rationalized" sector-based tariffs being introduced by the United States.

Not helped by mixed commodity prices, the resources heavy S&P/TSX Composite Index closed down 72.89 points at 26,210.56, amid mixed sectors, none of which were either up or down by more than 1%.

While the TSX was lower today, U.S. stock markets recorded gains. This as one Macquarie strategist noted an overnight court ruling may speed up the introduction of "more rationalized" sector-based tariffs from the United States, while also noting Nvidia's upbeat sales outlook was also contributing to the rally.

Yesterday evening, with U.S. markets closed, a three-judge panel on the U.S. Court of International Trade (CIT) ruled unanimously the emergency laws President Donald Trump invoked did not give the him the unilateral authority to impose tariffs on nearly every country via his reciprocal tariff program, nor his retaliatory tariffs.

"For observers that believed that the reciprocal tariffs were adverse to the economy -- in the sense that they would lead to an economic slowdown and higher measured consumer inflation and induced by the 'tax effect' on consumers and businesses -- the prospect that the reciprocal tariffs have been nullified by the CIT is being taken as 'good news'. It has led to stocks being way up today, for example," said Thierry Wizman, Global FX & Rates Strategist at Macquarie.

To be sure however, an appeals court temporarily restored the tariffs on Thursday afternoon while an appeal is heard.

The bottom line on tariffs, Wizman said, is that while the CIT's ruling marks a first and significant legal challenge to the use of immediate emergency powers and the invocation of arbitrary 'retaliation', the ruling is not expansive as it pertains to executive powers in trade more generally, so long as executive actions address true emergencies, are subject to review, and do not contravene other laws. "After all, it was evident on "Liberation Day" that the reciprocal tariffs were ill-formulated, overly abrupt, and too aggressive," he added.

With that, Wizman said, the CIT's ruling yesterday can actually speed up the introduction of "more rationalized", sector-based tariffs, many of which may now be announced, but not yet imposed, soon. "Because of this, we caution against excessive displays of 'relief,' especially in the USD. More surprises of tariffs certainly lie around the corner," he added.

For his part, Canadian Prime Minister Mark Carney said he "welcomes" the decision by the CIT to strike down President Trump's broad-based tariffs on most countries.

Of commodities, West Texas Intermediate crude oil closed lower on Thursday as rising supplies checked investor optimism after a court blocked most of President Donald Trump's tariffs, though rising supply checked optimism.

WTI oil for July delivery closed down $0.90 to settle a US$60.94 per barrel, while July Brent crude was last seen down $0.82 to US$64.08.

Meanwhile, gold traded higher late afternoon on Thursday as the dollar dropped after a court blocked most of President Donald Trump's tariffs while the U.S. economy weakened less than expected in the first quarter. Gold for August delivery was last seen up $17.90 to US$3,340.30 per ounce.

Staying on commodities, Rosenberg Research is 'overweight' Utilities and 'underweight' Energy, as outlined in a market strategy note it published today with a focus on U.S. equities. "With valuations still stretched and clear headwinds for earnings, we recommend caution from a tactical viewpoint," it said in summary.

The bullish view of Rosenberg Research on Utilities is derived from the fact that the U.S. power grid is "not ready for the growth in electricity demand and it needs to develop the transmission infrastructure that enables load sharing during periods of peak demand". According to the research, Utilities are "undisputedly" the biggest beneficiaries of the sharp rise in electricity demand and are available at a PEG ratio of 1.2x, a level it finds "attractive given the risk/reward calculus at this juncture."

As a sector highly integrated with the global market, Energy has been a relative underperformer on a year to date basis following the April 2 reciprocal tariff announcement that clouded the global macroeconomic outlook, Rosenberg said. It cited some factors likely to limit the upside to energy prices over the next 12 months, potentially higher U.S. shale production linked to policy shifts by the Trump 2.0 Administration, the unwinding of OPEC+ production cuts and an uncertain economic outlook. Additionally, a protectionist trade policy will likely lead to a firm U.S. dollar, which is a net negative for most commodities, including oil, it added.

"Our bearish view on oil and oil-related equities does not currently factor in a full-fledged Ukraine/Russia ceasefire, which, if consummated, will create more downside price pressure."