04:12 PM EDT, 07/18/2025 (MT Newswires) -- The Toronto Stock Exchange slipped more than 70 points Friday afternoon, falling off a day-prior record close.

The S&P/TSX Composite Index closed down 72.70 points at 27,314.23, compared with Thursday's 27,386.34. Industrials and Information Technology were the biggest decliners, down 4.6% and 1.9%, respectively. Utilities topped the gainers, rising 2.1%.

Stefane Marion and Matthieu Arseneau, economists at the National Bank of Canada, said in their monthly equity monitor report that in July, Canada was one of only 11 countries in the Morgan Stanley Capital International All Country World Index to reach new equity market highs in 2025. The S&P/TSX has climbed 10.8% year-to-date, hitting a record 27,386.93 on Thursday.

The gains were supported by positive earnings forecasts and an 11% expected growth in earnings per share, the economists said, adding that risks remain, including the threat of new U.S. tariffs and signs of slowing growth. "Nonetheless, optimism persists around a possible Canada-U.S. trade deal and Ottawa's efforts to reduce regulatory burdens and boost investment."

The economists said given this backdrop, they are keeping their asset allocation unchanged after last month's move to slightly reduce fixed income and increase their position in Canadian equities. However, their overall outlook remains cautious amid geopolitical uncertainties and tariff wars, with the U.S. President reigniting trade tensions by announcing new double-digit tariffs set to begin on Aug. 1, the note added.

Assistant chief economist Nathan Janzen and senior economist Claire Fan at RBC said the Bank of Canada's Business Outlook Survey, due Monday, is expected to show early signs of stabilization in business expectations for sales, hiring, and input costs in the second quarter, following sharp declines in the first quarter.

This improvement comes after trade tensions eased. While Canada was a major focus of U.S. trade complaints in Q1, it was left off the list of countries facing U.S. tariffs in April. A tariff exemption for trade under the United States-Mexico-Canada Agreement introduced in March also remains in place, they said.

More broadly, several indicators suggest a stabilizing Canadian economy in Q2. Job postings have steadied, and small business confidence has continued to recover since a sharp drop in March, they added.

"The survey could highlight a divergence between sectors directly exposed to trade headwinds (such as manufacturing and transportation), which will likely maintain a softer outlook, while other sectors, particularly consumer-facing businesses, that are more positive," they said.

West Texas Intermediate (WTI) closed lower on Friday, surrendering earlier gains that came on strong summer demand and continuing violence in the Middle East. After trading as high as US$68.96 WTI crude oil for August delivery closed down US$0.20 to settle at US$67.34 per barrel, while September Brent crude was last seen down US$28 to US$69.24.

Gold traded higher midafternoon on Friday as the dollar and treasury yields weakened. Gold for August delivery was last seen up US$12.80 to US$3,358.10 per ounce.