04:29 PM EDT, 07/09/2025 (MT Newswires) -- The Toronto Stock Exchange closed higher for the first time in three sessions on Wednesday as investors bid up financial issues, even as U.S. President's capricious tariff policies are raising concerns for that country's growth and its outlook for inflation.

The S&P/TSX Composite Index closed up 68.75 points to 26,972.32. Base Metal led the big decliners, down 2.5%, while Industrials and Financial topped the list, rising 2.3% and 1.5%, respectively.

Derek Holt, head of capital market economics at Scotiabank said U.S. President Trump is ramping up pressure on the Federal Reserve and Chair Jerome Powell to cut interest rates now and is applying pressure on trading partners because he appears to be panicking.

Earlier in the day, Trump sent letters to at least seven countries, including Algeria, Iraq, Libya, Sri Lanka, and the Philippines, assigning new US tariffs. This follows his Monday letters to countries like Japan, South Korea, South Africa, Indonesia, Malaysia, and Thailand.

Holt said Trump is worried that upcoming data will show his new tariffs pushing prices higher, which would justify the Fed's caution and make future rate cuts harder to defend. "Trump is also panicking because major trading partners are hardly beating a path to the US administration's door in a quest to sign trade deals; they understand the US political cycle better than the US administration that overplayed its protectionist hand," he added.

A worst-case scenario for Trump could include issues like tariffs fueling inflation in the coming months, the Fed holding rates steady for longer, and lifting the debt ceiling leading to a surge in government bond issuance, pushing yields higher, similar to what happened in 2023, Holt said.

On top of that, stricter immigration rules could slow economic growth while adding modest inflation pressure. Trump's 'Big Beautiful Bill' may not deliver long-term economic gains either, Holt said, adding that "America's trading partners probably know all of this. Trump's willingness to de-escalate trade tensions could improve as the costs of his policies become more evident and the midterms approach."

West Texas Intermediate (WTI) oil closed with a small gain on Wednesday after Houthi militants attacked and sunk a cargo ship in the Red Sea, though an unexpected rise in U.S. inventories last week offered a counter to the safe-haven demand.

WTI oil for August delivery closed up US$0.05 to settle at US$68.38 per barrel, while September Brent crude was last seen up US$0.06 to US$70.21.

Gold edged higher midafternoon on Wednesday even as the dollar rose with the metal remaining rangebound after falling off a record high set in June.

Gold for August delivery was last seen up US$3.50 to US$3,320.40 per ounce, nearly 7% below the June 13 record high of US$3,452.80.