04:27 PM EDT, 10/31/2024 (MT Newswires) -- The Toronto Stock Exchange had an eighth loss in the last nine sessions with U.S. factors weighing as investors look to cut risk ahead of an uncertain outcome for Tuesday's presidential election.

The S&P/TSX Composite Index closed down 350.92 points to close the day at 24,156.87, the lowest since Oct.8. Information Technology, down 2.8%, ws the biggest decliner, followed by Basic Metals, down 2.1%. Healthcare, up 2.6%, the sole gainer. Declining issues led advancers 1,530 to 428, with 128 listings closing unchanged.

West Texas Intermediate (WTI) crude oil closed higher for a second day on Thursday following an unexpected drop in U.S. oil inventories and reports OPEC+ is considering postponing a plan to add 180.000 barrels per day of additional supply monthly beginning in December. West Texas Intermediate crude for December delivery closed up US$0.61 to settle at US$69.26 per barrel, while December Brent crude, the global benchmark, closed up US$0.58 to US$73.16.

Gold traded sharply down from a record high mid-afternoon on Thursday on profit taking as a key U.S. inflation measure edged down in September. Gold for December delivery was last seen down US$51.50 to US$2,749.30 per ounce, after closing above the US$2,800 mark for the first time a day earlier.

Thursday's drop comes as all major North American fell, with nervous traders moving to cut risk as polls show a tight race in the Nov.5 presidential election. Ian Pollick, Managing Director & Head, FICC Strategy, Fixed Income, Currency & Commodities, at CIBC Capital Markets, in a note today said "Trading politics is never a great way to make money," but added the importance of the upcoming election, and the attendant impact on markets, means it had to give some thought as to how Canadian rates may be impacted by any outcome.

Pollick said the impact of the election on the rates market can be though along two axes, including: one, tariffs and two, fiscal expansion. For the Canadian economy, uncertainty is by far the most important medium-term theme. He added the threat of what ultimate tariffs (or the 2026 USMCA sunset review) look like may weigh on business sentiment, restricting capital deepening. This happened following the 2016 election, and measures of trade confidence plummeted around that time, it noted.

In a separate note Scotiabank Global Economics noted the outcome of the U.S. presidential race "remains a coin-toss." Given former President Trump's focus on trade policy in this campaign and the ongoing threat of tariffs that are central to his economic platform, trade policy uncertainty is almost certain to rise should he win, the bank said. Using a trade policy market volatility index, Scotia measured the economic effects of trade related uncertainty stemming from a potential second Trump presidency. "Trade-related uncertainty spiked significantly during his first term, and remains a major source of uncertainty going into next month's election," it added.

Scotia said: "Continued trade policy uncertainty under a potential second Trump term, mirroring the elevated levels seen during his first term, could see the level of U.S. GDP a full percentage point weaker at the end of his term relative to a scenario in which there is no rise in uncertainty, with important spillovers effect on the Canadian economy."

Scotia added: "This projected loss of output is attributed solely to trade policy uncertainty and is separate from the impact of actual policy measures that could be implemented under Mr. Trump, like tariffs, tax cuts, and deportations. Those measures, particularly tariffs, are inflationary, whereas trade-related uncertainty on its own is disinflationary as it weakens demand and investment."

Meanwhile, before the election and the Federal Reserve's policy meeting next week, jobs will be on the minds' of many market watchers ahead of Friday's U.S. October employment report. According to FactSet, economists predict the economy added 120,000 jobs in October, a steep drop from the surprise 254,000 increase in September.

Jobs won't only be on the minds' of those in the U.S. either. Today, National Bank of Canada said it's not just the the Survey of Employment, Payrolls and Hours (SEPH) report that hints at weak labor demand in Canada. National Bank noted businesses are telling the Bank of Canada it should not expect hiring to pick up materially. As per the last Business Outlook Survey, hiring plans are comfortably below average.

"When it comes to the jobs market it takes two to tango," said National Bank, before adding" "We see the labour supply out there but for many job seekers, there is no dance partner. That makes a sustained pick-up in hiring difficult to achieve and leaves the path of least resistance for the jobless rate pointed higher. And that should contribute to growing pressure to follow October's 50 bp cut with another in December."