04:38 PM EDT, 10/24/2024 (MT Newswires) -- The Toronto Stock Exchange for a fourth-straight day on Thursday on profit taking following its Oct.18 record, falling oil prices and as traders look to limit risk ahead of next month's U.S. presidential election even as lower interest rates offer support.

The S&P/TSX Composite Index closed down 22.07 points to end at 24,551.55. The biggest decliners were Battery Metals, down 1.9%, and Information Technology, down 1.2%, while Information Technology, up 1.27%, along with Financials, up 0.07%, led gaining groups. Advancing issues outpaced decliners 1,054 to 734, with 193 closing unchanged.

West Texas Intermediate (WTI) crude oil closed lower on Thursday for a second, settling into a tight range as violence in the Middle East and an uncertain outcome for the U.S. presidential election are offset by rising U.S. inventories and robust supply. WTI crude oil for December delivery closed down US$0.58 to settle at US$70.19 per barrel, while December Brent crude, the global benchmark, was last seen down US$0.72 to US$74.24.

Gold traded higher early on Thursday as the dollar weakened after U.S initial jobless claims came in under expectations. Gold for December delivery was last seen up US$19.70 to US$2,749.10 per ounce.

The approach of the U.S. presidential election has investors assessing risks as polls show a tight race between Kamala Harris and Donald Trump, even as the U.S. economy remains strong.

"In the United States, the focus is clearly on the November 5 election Uncertainty over the next occupant of the Oval Office is dampening household confidence. However, several economic indicators-led by September's jobs numbers-have improved recently," Desjardins said in a Thursday note.

Desjardins also noted the Bank of Canada has stepped up the pace of monetary easing and has now cut the overnight policy rate by 125 basis points since June to 3.75%. "Citing below-target inflation, a cooling labour market and economic activity that has underperformed expectations, the BoC believes the downside risks to inflation are more elevated than at any time in recent memory," it said. "And we agree. Not only do current economic conditions exhibit ongoing slack in the economy, but the headwinds to growth are only just starting to come into view."

Desjardins noted "population growth, particularly among non-permanent residents, has only recently started to show signs of slowing as fewer study permits have been issued to foreign students. Also, the mortgage renewal wall is also just around the corner in 2025 and 2026. Add to this the uncertainty of the U.S. presidential election, and the case for a more rapid return to the neutral rate is now quite strong".

While U.S. politics remain at the fore, the Bank of Canada's 50 basis point cut to interest rates on Wednesday is offering support. Brian Belski, BMO Capital Markets chief investment strategist, said he expects the central bank's push to swiftly bring rates down is likely to support stocks in to the new year.

"With inflationary trends continuing to ease, the Bank of Canada clearly remains in an easing cycle, as witnessed by their 50-bps cut today - an increasingly aggressive shift in our view. In fact ... we believe this is a "proactive" non-recessionary easing cycle that is likely to be a strong positive catalyst for TSX performance into year-end," Belski said in a note.

Belski said the TSX generally strengthens during a rate-cutting cycle and he expects the exchange's current rally to follow the pattern.

"Our work shows the TSX has historically rallied right to the end of the cycle, only pausing after the last rate cut. Indeed, the market then typically stumbles for a few months after the easing cycle ends as the market adjusts to the shift in rate expectations. However, the market then tends to rally again to new highs as the Bank of Canada holds rates steady or even starts moderately hiking. Overall, even though rate cut expectations will likely be adjusted over the course of the year, we believe the trend is for lower policy rates into next year and as such the TSX continuing to hit new all-time highs well into 2025," he noted.