04:24 PM EDT, 07/24/2024 (MT Newswires) -- The Toronto Stock Exchange closed lower for a second-straight session on Tuesday as profit taking outweighed a second cut to interest rates from the Bank of Canada and rising commodity prices.

The S&P/TSX Composite Index closed down 174.18 points to 22,639.57, with the drop led by the Healthcare and Information Technology indices, down 7.1% and 2.1% respectively, while Utilities posted the largest gains at 0.6%.

Healthcare was hit as Bausch Health Companies ( BHC ) fell 23% to close at $8.02 after a report said the company was planned to file for bankruptcy. which the company firmly denied. The shares dropped as low as $5.45 prior to the company's explicit denial, the lowest in more than a decade.

The Bank of Canada made its second-straight 25 basis point cut to interest rates on Wednesday, making Canada the first country to cut rates twice. The cut, which was expected, is unlikely to be the last this year.

National Bank in a note said the bottom line is that even with the pick-up in core inflation over the last two months, the outcome of today's decision to cut was "never really in doubt." Between the progress already made on inflation and the ongoing loosening of the labor market, the BoC had plenty of leeway to ease, it added.

"Indeed," the bank noted, "following the cut in June, we'd considered a follow-on move in July the 'default' move as we discussed at the time. After all, if you believe less restrictive policy is necessary, why only deliver 25 bps of easing?"

If, National said, incoming data softens more in line with its outlook - National sees Q3 GDP at minus 0.3% - there will be a strong case for another cut in September. "Ultimately though," it added, "incoming inflation data is most likely to be the deciding factor."

National noted there is just one report between now and the next decision; and it said if core inflation returns to January to April type readings and the real economy remains sluggish, we can probably expect a cut. If inflation looks more like it did in May or June, the BoC may want a bit more time to assess.

RBC noted September is a firm "GO" for a cut unless there is a disastrous CPI print. It said with only one inflation report before the next meeting, "the bar to them not cutting is very high." RBC also noted the BoC does not guide the market like the Fed, but it said today's communications are about as close to a Fed style guidance as possible.

"We handicap the odds of a September cut at 90%," it added.

According to David Doyle, head of economics at Macquarie, BoC Governor Macklem was "unambiguously dovish" during his press conference, stressing progress on year over year inflation measures and placing emphasis on excess supply and labor market slack. Doyle noted there was no mention of the recent upturn in monthly underlying inflation readings, although the statement did suggest that shelter and other services were holding inflation up.

Macquarie altered its baseline view on the BoC based on today's communication. It now expects the overnight rate to fall to 3.75% (previously 4.25%) at end-2024 and expects that by Q3 2025 it will decline to 2.75% (prev. 3.24%). Doyle said policy divergence is likely to become even more substantial ahead with the spread between the Overnight rate and the Fed Funds rate, reaching the 1.75 to 2.0% range in Macquarie's estimation. This would mark the largest gap since the late 1990s and is likely to put downward pressure on the loonie, he added.

Gold rose for a second day on Wednesday as the dollar weakened ahead of key U.S. inflation data coming on Friday. Gold for December delivery was last seen up US$9.40 to US$2,464.60 per ounce.

West Texas Intermediate (WTI) crude rose for the first time in four sessions, rising off a six-week low after a report showed a fourth-straight weekly drop in U.S. oil inventories. WTI crude oil for September delivery closed up US$0.63 to settle at US$7759 per barrel, while September Brent crude, the global benchmark, closed up US$0.65 to US$81.71.