12:26 PM EST, 02/28/2025 (MT Newswires) -- The Toronto Stock Exchange is down 13 points at midday, with most sectors lower. The technology sector, down 1.75%, is the biggest decliner, followed by miners, down 1.2%.

Oil prices fell early on Friday amid market uncertainty over the impact of U.S. President Donald Trump's decision to impose a 10% tariff on oil and gas imports from Canada, its largest supplier, while tightening sanctions on Venezuela and Iran.

Gold traded lower for a second day early on Friday as the dollar rose after a key U.S inflation measure eased last month.

Helping to cap losses, Desjardins noted Canada's economy surpassed all expectations in the second half of last year. Not only did GDP growth clock in at 2.6% in Q4, well above the 1.7% consensus forecast, but the third quarter advance was also revised up significantly.

Material revisions to the third quarter reading also provided a positive surprise, said Royce Mendes over at Desjardins. "All told, this set of data would typically be exactly what the Bank of Canada would be looking for to take a pause in its rate cutting cycle. While our official call is that the central bank holds rates in March, the situation is extremely tenuous, with the possible imposition of US tariffs on Canadian goods as early as next week. That's limited the market reaction to this surprising set of data," he added.

For RBC, the bottom line is that the 2.6% (annualized rate) increase in Q4 GDP was "substantially" stronger than expected with broadly-based increases in spending across households and businesses -- and it noted the early estimate for January is that GDP continued to rise in Q1 2025.

It added: "Absent significant broadly based tariffs being imposed on schedule next week (not expected in our own base-case) the data increases the odds that the BoC will not cut the overnight rate further in March, and the onus may now be on future data to soften to justify additional cuts."

CIBC noted two year yields saw an initial climb after the data but reversed course, and the Canadian dollar similarly couldn't sustain a rally. Markets are likely reserving judgement in terms of both the Canadian dollar and bond yields, given the potential for news on tariffs as early as next week, the bank said.

Meanwhile, in other domestic economic news, there was a budgetary surplus of $1.0 billion in December 2024, compared to a deficit of $4.5 billion in December 2023, the Department of Finance said Friday.