04:22 PM EDT, 07/18/2024 (MT Newswires) -- The Toronto Stock Exchange fell for a second day on Thursday as a possible correction takes hold following five days of fresh record highs.

The S&P/TSX Composite Index closed down 124.41 points down at 22,726.76, with Base Metals, down 4.0%, and Battery Metals, down 3.2%, the weakest sectors in the session. Telecoms and Energy were the sole gainers on the day, up 0.18% and 0.007%, respectively.

West Texas Intermediate (WTI) crude oil closed with a small loss, giving up some day-prior gains spurred by falling U.S. oil inventories and a weaker dollar after China's ruling Communist Party ended its Third Plenum with little detail on measures to stimulate the No.1 oil importer's sagging economy. WTI crude for August delivery closed down US$0.03 to settle at US$82.82 per barrel, while September Brent crude, the global benchmark, closed up US$0.03 to US$85.11.

Gold traded lower late afternoon as expectations for lower U.S. interest rates was offset by rising treasury yields and a rebounding dollar. Gold for August delivery was last seen down US$14.50 to US$2,445.40 per ounce, under the US$2,467.80 record close set two days earlier.

Given the lack of key economic data in Canada both yesterday and today, market watchers are already looking ahead to next week's Bank of Canada update. RBC Capital Markets in a BoC Preview said the balance of evidence indicates another rate cut should be forthcoming on July 24. It added excess supply in product and labor markets should give the BoC enough confidence to cut again, but the risks are a less dovish communication versus market pricing.

RBC doubts the BoC will cut and indicate a pause in the cycle to assess the impact (i.e. basically ruling out a September cut. More likely, it said, language to the effect of 'data dependency' or taking decisions on a meeting-by-meeting basis would continue to be used. "They will want to preserve maximum flexibility and not box themselves in so early in the easing cycle," RBC added.

National Bank in a 'Monthly Economic Monitor' for July to August noted the BoC began cutting its policy rate in June, and is due to make a further decision at the end of July. In National's view, the BoC's recent communications illustrate "a clear desire" to reduce the degree of restriction in monetary policy.

"This is good news, as it is high time for the Bank of Canada to turn its attention away from inflation and wage data, which are slow to react to the economic environment," National said.