(Updates with morning prices)

By Sanchayaita Roy

May 15 (Reuters) - Canada's main stock index edged

higher on Thursday, although the gains were capped by a dip in

energy stocks, while investors remained optimistic on more

potential trade deals around the world with the U.S.

The Toronto Stock Exchange's S&P/TSX composite index

was up 0.3% at 25,774.81 points, on track for eight

straight sessions of gains.

A series of investment deals from the Middle East during

U.S. President Donald Trump's ongoing Gulf tour, along with

earlier positive news on the U.S.-China tariff dispute and

cooler U.S. inflation data, is influencing market sentiment.

"We're hearing about deals between the U.S. and a few Middle

East countries, big technology deals, etc...setting the tone for

the market," said Allan Small, senior investment advisor at

Allan Small Financial Group with iA Private Wealth.

"The market is optimistic that trade deals can get done...

but right now it's all up to the U.S. trying to make trade deals

with other countries."

On TSX, energy stocks fell 1.9%, tracking lower

oil prices, while the healthcare subindex dropped

nearly 1%.

Meanwhile, mining stocks gained 0.6% as gold

rebounded from early losses.

Industrial stocks also rose 1.5%, with

Atkinsrealis Group ( SNCAF ) up 9.6%, after the engineering

services firm reported first-quarter profit and revenue above

estimates.

Meanwhile, U.S. Federal Reserve chair Jerome Powell said

central bank officials felt they needed to reconsider the key

elements around jobs as well as inflation in their current

monetary policy approach.

U.S. retail sales growth slowed in April, while a Labor

Department report showed the producer price index for final

demand fell 0.5% for the same month, compared to an expectation

of a 0.2% rise.

Back home, Canadian factory sales dropped 1.4% in March from

February, while home sales fell 0.1% in April from March and

were down 9.8% year-on-year.

However, wholesale trade grew 0.2% in March from February on

higher sales in the motor vehicle and parts subsector.