04:25 PM EST, 12/18/2024 (MT Newswires) -- The Toronto Stock Exchange fell for a fifth-straight session on Wednesday, taking it back below the 25,000 level for the first time in a month, largely on investment concerns as the governing Liberal Party finds itself in turmoil as the nation faces a potential tariffs war with the United States in just a few weeks time.

The S&P/TSX Composite Index closed down 562.71 points to close at 24,557, the lowest since Dec.5. All sectors ended lower, led by Information Technology, down 4.55%, and Base Metals, down 3.57%.

The resources heavy index hasn't been helped by commodity prices of late, and now finds itself more than 1,100 points below the Dec.6 record close of 25,691.8.

Prime Minister Justin Trudeau is reportedly considering his options after his deputy and finance minister, Chrystia Freeland, resigned from cabinet on Monday and he was said to flip flop on his choice of a replacement for her. All of this as U.S. President-elect Trump taunts Trudeau amid threats of introducing a 25% tariff on Canadian goods once he takes office in the new year

One bright light among individual companies today was Canadian waste-management company GFL Environmental (GFL.TO), which gained 3.4% as The Globe and Mail reported it is in exclusive talks with Apollo Global Management to sell its environmental services division for around $8-billion.

In contrast, Barrick Gold ( GOLD ) was down 3.8% as it confirmed Wednesday its two operating entities in Mali submitted a request for arbitration to the International Centre for the Settlement of Investment Disputes (ICSID), in accordance with the provisions of their respective Mining Conventions with the State of Mali, to address matters amid its dispute with Mali's government over the Loulo-Gounkoto mining complex.

One bit of good news for Canada came from the U.S. Federal Reserve. After following through as expected on its 25 basis points cut today, TD Economics said everyone immediately moved to see how that central bank's view on future rate cuts had shifted. No surprise, TD noted, the Fed expects to be more cautious in 2025 than it forecast prior to the election of President Trump. It has removed 50 bps in cuts, while it has marked up its outlook for inflation. It also noted that more members are aligned to the median view of 50 basis points in cuts than were aligned on 100 bps in September.

TD noted market pricing agreed with the Fed's more cautious approach, with an increasing likelihood that the Fed will have to pause rate cuts in January. It said "While we don't think investors should rule out a January cut completely, with the Fed's preferred inflation rate stuck at 2.8% year-on-year, and expectations that President Trump will follow through on his inflationary political strategy, it makes sense that the Fed will be much more cautious come the New Year.".

All of this means the divergence between Canada and the United States on rates may not turn out to be as wide as feared.

One equity strategist says that Trump's threat to impose sweeping tariffs on goods from Canada on his first day in office next month would immediately hurt American consumers and is unlikely to happen without major carveouts. "The way I think of (Trump) is that he should be taken seriously but not literally," Ian de Verteuil, equity strategist with CIBC Capital Markets, told BNN Bloomberg in a Wednesday interview. "Historically, he's quite extreme and uses a lot of rhetoric, but at the end of the day... we need to think it through in terms of what he's trying to achieve, and let's go back to first principles: MAGA."

He said Trump's Make America Great Again (MAGA) slogan would be tested if Trump followed through on his threat to impose a 25% on Mexican and Canadian imports unless both countries address the incoming president's border concerns.

West Texas Intermediate (WTI) crude oil closed higher after a report showed U.S. oil inventories fell for a fourth-straight week. WTI crude for January delivery closed up US$0.50 to settle at US$70.58 per barrel, while February Brent crude, the global benchmark, was last seen up US$0.33 to US$73.52.

Gold fell sharply by late afternoon after the Federal Reserve cut o U.S. interest rates by 25 basis points as expected, but warned the pace of cuts may slow in the new year. Gold for February delivery was last seen down US$52.40 to US$2,609.60 0 per ounce.