12:16 PM EST, 02/21/2025 (MT Newswires) -- The Toronto Stock Exchange is down 150 points with most sectors lower.

The biggest decliners are miners (-2.7%), followed by healthcare (-1.4%) and technology (-1.2%).

Utilities and telecoms sectors, up 0.6% and 0.7%, respectively, are the sole gainers.

The losses come even after data showed retail sales jumped here in December, with real activity reporting its strongest month since mid-2022. Retail sales rose 2.5% month-over-month (m/m) in December, beating Statistics Canada's advance estimate of 1.6% growth.

TD Economics noted retail activity ended the year "with a bang". TD said given the dampening effect of the GST-HST tax break on nominal figures, real sales provide a better measure of consumer activity, pointing to a swift rebound in spending behaviour. As a result, TD expects consumption growth for Q4 2024 to reach around 4% (annualized), pushing GDP growth above trend.

The key question now, TD said, is how long this momentum will last. Given the negative flash estimate for January, it added some of December's strength is likely to fade into early 2025, with consumption growth expected to slow to around 2.0% (annualized) in Q1 2025. TD said the fundamentals "remain solid" -- a steady income growth, a resilient labour market, accumulated savings along with two-percentage point reduction in the overnight rate, and easing debt-servicing pressure should continue to support consumer spending. However, it added, tariff threats pose a significant risk to this positive outlook. "If they begin to erode labour market strength, consumer spending could quickly lose steam."

Elsewhere, CIBC said consumer spending was clearly improving during the second half of 2024, even before accounting for the temporary boost in December from the GST holiday. However, recent tariff uncertainty may have resulted in households tightening the purse strings again if there was concern regarding employment prospects. CIBC expects consumer spending to slow in the first half of this year, before accelerating again in the second half and 2026 if a worst case tariff scenario is avoided.

David Rosenberg noted Canadian retail sales got a "big lift" from the sales tax holiday, and the winning streak has been extended to six months. Credit-sensitive spending is percolating, which means the Bank of Canada's aggressive rate cuts are working, he said, before adding: "The case for a near-term policy pause continues to build."

Meanwhile, concerns around a global tariffs war continue to weigh. The Globe and Mail reported that U.S. President Donald Trump is proposing to introduce tariffs globally on softwood lumber in April, broadening the scope of threatened levies beyond Canada to also hit Europe. It noted the U.S. Department of Commerce already imposes duties against lumber shipments from Canada into the United States. On Wednesday night, Trump added lumber and forest products to the list of global goods targeted for tariffs.

Separately, The Globe and Mail is reporting that the federal government will remove more than half of its exceptions from the Canada Free Trade Agreement (CFTA) as part of a push to liberalize trade within the country, according to a senior government official.