July 29 (Reuters) - Canada's main stock index retreated on

Wednesday from the last session's record high, dragged by losses

in Allied Gold ( AAUC ) after its C$5.5 billion ($3.90 billion)

sale was scrapped, while investors remained cautious ahead of

the Federal Reserve's interest rate decision.

The S&P/TSX Composite index dipped 0.6% to

35,544.99 points after rising for three straight sessions.

* Shares of Allied Gold ( AAUC ) were down 17.6% and headed for their

biggest one-day slump,after the Canadian miner and Zijin Gold ( ZJNGF )

scrapped their deal and the Chinese company instead

bought a 9.2% stake in Allied Gold ( AAUC ) for about $295 million.

* Meanwhile, Cenovus Energy jumped 5.2% as the oil

firm raised its 2026 production outlook, after posting a more

than threefold jump in second-quarter profit.

* Energy stocks firmed about 2.7% as oil prices

surged nearly 7% after major airstrikes resumed in the Middle

East, dashing hopes for an imminent end to the U.S.-Israeli war

with Iran.

* Focus will turn to the Federal Reserve's interest rate

decision, due later in the day, where policymakers are largely

expected to keep rates unchanged although rate-hike bets have

increased in recent days.

* Traders see a 95% chance of a U.S. interest rate hike by

September, according to LSEG data.

* "Our expectation is that today's (July 29) decision should

primarily influence the pace and peak of hike risk, with points

further out likely somewhat stickier," Goldman Sachs economists

said in a note.

* Canada's benchmark index hit a record high in the previous

session, with technology shares logging their best

two-day rally since 2002.

* On the trade front, U.S. President Donald Trump said on

Tuesday that he does not care about updating the North American

trade agreement, even as Canada disclosed plans to send senior

trade officials to Washington for more talks.