04:28 PM EDT, 06/27/2025 (MT Newswires) -- The Toronto Stock Exchange closed down from a record high on Friday, giving up early gains after U.S. President Donald Trump terminated all discussions around a trade deal with Canada, "effective immediately".

The S&P/TSX Composite Index closed down 59.63 points at 26,692.32, falling off a session high of 26,806.62.

Despite overall losses, most sectors were higher, with the Battery Metals Index. up near 6.7%, the biggest gainer. Base Metals was the biggest loser, down 1.35%.

Trump, in an afternoon social media post, said Canada "just announced that they are putting a Digital Services Tax on our American Technology Companies which is a direct and blatant attack on our Country." According to Trump, Canada is "obviously copying the European Union, which has done the same thing, and is currently under discussion with us [on trade], also."

Trump also raised the prospect of an all-out trade war between the United States and Canada. In his post he added: "We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period."

This comes after Trump and Prime Minister Mark Carney said they would pursue negotiations toward a new trade and security deal by mid July, a 30-day deadline from their talks during a G-7 Summit staged at an Alberta mountain resort earlier this month.

CBC TV caught Carney as he left his office in Ottawa after the Trump update and the PM said he had not spoken to the President today, and added: "We will continue to conduct these complex negotiations in the best interests of Canadians."

While some speculated Trump's threat may well just be his way of moving trade negotiations onward, a few observers noted the first payments from Canada's digital services tax, which was enacted last year and applies retroactively to 2022, are set to be collected June 30. Much of the revenue will be collected from U.S. tech giants.

The U.S. threat overshadowed the release earlier Friday of what Scotiabank referred to as a "messy" 0.1% drop in Canada's April GDP data as the Bank of Canada faces a "more complicated inflation picture". Derek Holt, Head of Capital Markets Economics at Scotiabank, noted second-quarter GDP "might be tracking a decline" due to varied drivers including tariffs, weather and forest fires. At the same time, he also noted, core inflation to date "remains too high and sticky ... ahead of forward-looking inflation risks beyond just GDP and slack arguments."

Holt noted Canada's economy "stumbled" in April and May with an upward revision to March. He said the reasons probably have much to do with unwinding the effects of tariff front-running and then forest fires and weather. Q1 and Q2 are likely best combined in terms of tracking in order to smooth out these effects with the focus remaining on second half of 2025 growth, and on the more complex drivers of core inflation to date and going forward, he added.

Holt noted the 0.1% drop month over month in April was two-tenths lower than Statcan's initial 'flash' guidance provided about a month ago. He said some of that was due to weaker data since then as guided. But, he added some of it was due to an upward revision to March GDP that moved up a tick to 0.2% m/m SA, thereby providing a higher jumping off point for April GDP and making continued growth more difficult.

Adding to the uncertain outlook for this country, Scotia in a separate note said nearly all Canadian provinces are poised for slowdowns in 2025.

Scotia said: "While the Canadian economy started the year with solid momentum, growth is expected to decelerate over the course of the year in the wake of the U.S. trade war and changes to Canadian immigration policy. Rising unemployment and lower population growth will weigh on consumption growth, and housing market activity has slowed as households delay major purchases. Exports are likely to decline due to the tariffs and spillovers from slower U.S. growth. We expect growth in central Canada to underperform the national average, given these provinces' higher exposure to trade risks.

"While we continue to think a recession will be avoided, there is a high degree of uncertainty as to how the tariffs will ultimately impact the economy -- in addition to the possibility of new tariffs. Policy measures from the federal and provincial governments could provide a boost to economic activity, especially over the medium-term. That said, the tariffs and impact of elevated uncertainty are likely to weigh on growth in all regions of the country in the near-term, and compound the effects of sharply reduced population growth."

Of commodities, West Texas Intermediate oil closed higher for a third day on Friday with traders seeing solid summer demand amid falling U.S. inventories even as supply is on the rise. WTI crude oil for August delivery closed up $0.28 to settle at US$65.52 per barrel, while August Brent crude was up $0.18 to US$67.91.

Gold traded sharply lower late afternoon as a key U.S. inflation measure ticked higher last month. Gold for August delivery was last seen down $63.80 to US$3,284.20 per ounce, the lowest since May 19.