04:22 PM EST, 12/04/2025 (MT Newswires) -- The Toronto Stock Exchange, on Thursday set its first record close since last Friday with investors buoyed by fiscal fourth-quarter earnings from the six big banks, improving commodity prices and a growing belief that the Canadian economy is holding up pretty well overall in the face of U.S. tariffs heading in to 2026.

The S&P/TSX Composite Index closed up 317.03 points, or 1%, to 31,477.57, adding to the 110-plus points gained yesterday. This took the index beyond last Friday's previous record finish of 31,382.78. Among sectors, most were higher, with the Battery Metals Index and Health Care up 3.4% and 3% respectively, and Information Technology up near 2.7%. In contrast Utilities was down 0.4% and Telecom down less than 0.1%.

The Canadian Press noted fourth quarter bank earnings wrapped Thursday with TD, BMO and CIBC all reporting higher than expected profits to add to the earning beats of Canada's other big banks this week. It said their combined profits, totaling $16.45 billion for the quarter, were up from $14.73 billion last year as banks, and the economy, largely shrugged off the effects of trade uncertainty with the United States.

Results, news agency added, did show some signs of stress as the Canadian unemployment rate hovers around 7%, with most banks adding to their provisions for potentially bad loans on the personal banking side and reporting tepid mortgage growth.

Of commodities, gold had edged higher lateafternoon Thursday as treasury yields rose ahead of key U.S. inflation data coming Friday and next week's interest-rate decision from the Federal Reserve. Gold for February delivery was last seen up $6.50 to US$4,239.00 per ounce.

Also, West Texas Intermediate crude oil was up for a second day as traders raised the commodity's risk premium despite abundant supply as negotiations for a peace agreement for Russia's war on Ukraine stalled while Ukrainian attacks on Russia's oil infrastructure continue. WTI crude oil for January delivery closed up $0.72 to settle at US$59.67 per barrel, while February Brent oil was last seen up $0.57 to US$63.24.

On the outlook for the Canadian economy, Beata Caranci, Chief Economist at TD Economics, in a client presentation from December 2025 said globally the negative effects from the trade war instigated by the United States have been muted relative to expectations, in part because countries show evidence of finding new markets or engaging in trade diversion. "Canada falls into the first bucket," she added.

Caranci said even with the lack of U.S. economic data due to the government shutdown, tensions have re-surfaced on the K-shaped economy. This term was previously used to describe the pandemic, marked by not just the differing fortunes between income groups, but diverging forces, she noted.

Caranci added: "Never say never when it comes to Canada. The resilience of the job market has been the biggest surprise of the quarter, and now the Federal budget offers an opportunity for a potential tailwind."

Meanwhile, Claire Fan and Annie Zheng at RBC Economics noted with CUSMA exemptions protecting the bulk of Canada-U.S. trade, most U.S. tariff revenue collected on imports from Canada this year have come from product specific tariffs imposed on autos, metals, and softwood lumber.

"This," the RBC duo said, "has created a fragmented Canadian economy where a subset of sectors faces a significant trade shock, while most other exports continue to enter the U.S. duty free. Even among the sectors targeted with tariffs, the impacts have been uneven given varying abilities among Canadian exporters and U.S. importers to find alternative international trade partners or domestic sources."

The RBC duo noted while it's still early, they now have enough data to begin to assess the impact of tariffs on Canadian industries behind key product groups accounting for more than 80% of U.S. tariffs collected on imports from Canada this year.

Overall, the pair said they track moderately lower manufacturing production and employment in most of the highly tariffed sectors in Canada. They added these trends have also been much less volatile than international trade flow, that were heavily distorted around when tariffs were implemented (as U.S. importers front-ran purchases to build pre-tariff inventories in Q1.)

Fan and Zheng said: "Selling prices among Canadian manufacturers have generally held up, with foreign buyers paying the bulk of initial tariff costs, but have led to declining U.S. corporate profits this year. We haven't seen systemically higher U.S. consumer prices but still expect those will show up more significantly in 2026."

Of note, Canada's CTV News is reporting that Prime Minister Mark Carney and U.S. President Donald Trump will have a brief meeting Friday at the Kennedy Center in Washington D.C.. Carney will also meet, separately, with Mexican President Claudia Sheinbaum, CTV News confirmed via the Mexican embassy in Canada. Sheinbaum will also meet privately with the U.S. president.

The three leaders will be in Washington for the FIFA World Cup draw on Friday, which will determine the tournament's composition between their countries, CTV News reported.