04:20 PM EDT, 07/11/2025 (MT Newswires) -- The Toronto Stock Exchange fell off a record high on Friday as U.S. President Donald Trump's threats to impost 35% tariffs on some Canadian imports on Aug.1 offset a better than expected jobs report.

The S&P/TSX Composite Index closed down 59.05 points, finishing the week at 27,023.25. Sectors were mixed with Information Technology and Financial leading the decliners, down 5.2% and 2.8%, respectively. Energy topped the list, rising 3.6%.

Canadian employment increased by 83,000, or 0.4%, month-over-month, in June, and the unemployment rate fell 0.1 percentage point to 6.9%, according to Statistics Canada's Labour Force Survey (LFS), while the consensus estimate expected little job growth and a rise in the unemployment rate to 7.1%. Derek Holt, head of capital market economics at Scotiabank, said there are a few possibilities why employers are hiring so much despite all the trade uncertainty.

One idea is that companies are rushing to produce goods before tariffs take full effect. But that doesn't explain why most of the job growth is happening in the service sector, he said. Another explanation is that Canada's domestic economy is doing better than its trade-related sectors. Many services are not tied to international trade, so are less affected by tariffs, Holt added.

It's also possible that Canadians are simply spending more at home. Restaurant activity is strong, and spending at bars and restaurants suggests people are choosing staycations instead of traveling to the United States for March break or summer holidays, keeping that money, and jobs, in Canada, he said.

National Bank economists Matthieu Arseneau and Kyle Dahms said despite the good news, some caution is needed. The LFS, which tracks employment, may be overstating job gains as it uses a 12-month average to estimate the number of non-permanent residents. To get a clearer picture, it is key to monitor another report called the Survey of Employment, Payrolls and Hours, which is based on employer records.

"While signs of stabilization are welcome, it remains that tariff-related uncertainty contributed to a deterioration in the labour market during the first half of the year," the economists said, adding that "all in all, this morning's report makes an interest rate cut at the end of July unlikely."

Andrew Hencic, head of TD Economics, said this is a week of two opposite signals. On one hand, the threat of new tariffs is growing, with a key deadline on Aug. 1. On the other, Canada's labor market has shown signs of strength, rebounding after earlier uncertainty. That said, inflation remains the main focus, with the next Consumer Price Index report due next week, he added.

"We expect the June CPI report to show inflation having strengthened, with both goods and services price pressures having heated up relative to May. But at this juncture, the uptick is unlikely to unnerve policymakers, particularly with inflation expectations remaining well anchored," Hencic said.

West Texas Intermediate (WTI) crude oil closed higher on Friday as traders look to strong summer demand, even as the International Energy Agency (IEA) warned supply is outstripping demand. West Texas Intermediate crude oil for August delivery was last seen up $1.88 to settle at US$68.45 per barrel, while September Brent crude was last seen up US$1.66 to US$70.30.

Gold traded higher late afternoon on Friday, rising for a third day despite a stronger dollar as safe-haven buying continues amid U.S. President Donald Trump's erratic tariff polices. Gold for August delivery was last seen up US$45.70 to US$3,371.40 per ounce.