04:16 PM EDT, 06/18/2025 (MT Newswires) -- The Toronto Stock Exchange recorded a modest gain on Wednesday, despite continuing tariff uncertainties and growing geopolitical tensions in the Middle East, as Rosenberg Research sees "continuing strength" in Canada's Aerospace and Defense sector and Scotiabank sees Canada's energy sector benefiting from a "power shift" that reflects the nation's "rising role in global energy resilience."

The S&P/TSX Composite Index closed up 18.46 points at 26,559.85, leaving it less than 60 points behind the record close hit on June 12. Among sectors, most were higher, led by Health Care, up near 2.2%. The Battery Metals Index and Energy sectors were the biggest losers, both down about 1%.

On sectors, Rosenberg Research said it sees "continuing strength" in the Aerospace and Defense sector across countries, including Canada, as geopolitical risk and new technologies send military budgets upward. It added: "The aerospace/defense theme has gone global and the bullish case keeps getting stronger. Military budgets are expanding sharply worldwide, and industry backlogs and production schedules are in acceleration mode. Few, if any industries, are experiencing such earnings visibility and positive re-rating of growth prospects, alongside the adaptation of new military technologies (especially related to cyber security and the escalating global war in space). In fact, it is becoming increasingly difficult to differentiate between these aerospace-defense companies and the technology sector at large, except that the former trades at far more compelling valuations. This remains one of our highest-conviction investment themes."

Of commodities today, gold prices fell late afternoon on Wednesday, as the two-day meeting of the Federal Reserve's policy committee ended with interest rates unchanged, as expected. Gold for August delivery was last seen down US$23.80 to US$3,383.10 per ounce.

West Texas Intermediate crude oil closed at to a five-month high as Israel and Iran continue an air war while the Trump Administration ponders entering the conflict in order to destroy Iran's nuclear-weapons program. WTI oil for July delivery closed up $0.30 to settle at US$75.15 per barrel, the highest since Jan.21, while August Brent crude was last seen up $0.10 to US$76.55.

This came as Scotiabank wrote of a "power shift" given Canada's "rising role in global energy resilience". Scotiabank noted geopolitical tensions in the Middle East are "a stark reminder that global fragmentation threatens not only stability but also the prospects for an orderly energy transition and societal wellbeing."

The bank said: "At the heart of this challenge lies energy security. As global systems grow more complex and alternatives scale, energy resilience is becoming inseparable from economic resilience. Deepening global imbalances are impossible to ignore. Growing gaps between supply and demand, ambition and investment, generation and infrastructure, and availability and affordability signal a volatile path ahead."

Governance deficits among key resource players are compounding these risks, Scotia said, noting nearly half of the world's oil is produced in OPEC+ and over a third of natural gas comes from the Middle East and Russia. Nearly 75% of critical mineral processing occurs in just one country, and half of those essential to clean energy are intentionally restricted by export controls around the world.

According to Scotia, Canada "stands apart" as it ranks high on the leaderboard across a wide range of energy resources, yet much of its potential remains untapped. "Years of underinvestment have eroded Canada's competitiveness," the bank said.

But, Scotia said, "a narrow window has opened". The bank noted that with strong governance and rich resource endowments, Canada is "well-positioned to become a reliable, responsible energy superpower", serving both Canadians and trusted allies. "But that promise must be earned," it added.

"The federal government has a plan. It aims to unlock major new investments in the country's most productive sectors. The ambition is bold, but success depends on restoring investor confidence and bringing business back to the table. That means addressing market failures, not by overriding markets, but by partnering with them to catalyze greater investment," the bank noted.

It added: "The weaponization of energy is a tangible risk. The greatest policy failure may be the persistent reluctance to fully internalize this reality. Canada must act decisively, before the next disruption rewrites the rules."