12:20 PM EST, 11/26/2024 (MT Newswires) -- The Toronto Stock Exchange is down 84 points at midday with most sectors in the red.

The biggest decliners are energy and miners, each down near 2%. Info tech is the sole gainer, up 1.4%.

Oil traded higher early on Tuesday as focus moved to this weekend's OPEC+ meeting and the impact of Donald Trump's tariff threats. President-elect Trump said he plans to slap a 25% tariff on imports from Mexico and Canada, the No.1 source of U.S. oil imports, when he assumes office, along with an additional 10% tariff on imports from China.

Gold prices rebounded from a 3.4% drop a day earlier on the Trump news.

Natural gas rose to the highest in a year following a 7.7% jump a day earlier as forecasts see the return of wintry temperatures for much of the country, raising heating demand for the fuel.

On the domestic front, the focus today was on a Bank of Canada speech on inflation and monetary policy that left Tiago Figueiredo over at Desjardins thinking Canadian central bankers don't want inflation to fall too far below their 2% target, but it doesn't seem like they are very concerned at this juncture.

Figueiredo noted Deputy Governor Mendes' speech was focused on three main drivers of inflation: inflation expectations, global factors, and demand. The question, Figueiredo noted as background to the speech, is how fast and how far policymakers need to cut rates to keep inflation at target. For his part, Mendes noted that while demand was weak, a simple Philips curve suggests that underlying inflationary pressures are consistent with annual price growth just slightly below target. Anchored inflation expectations will likely keep the pace of price growth from falling too far below target unless the Canadian economy weakens further. On that note, the Desjardins Q4 tracking estimate suggests that GDP growth will likely surpass the central bank's forecast of 2.0%. "Of course," Figueiredo said, "downside risks remain, particularly with President-elect Trump raising the prospect of 25% tariffs on all Canadian goods headed to the US. But, in keeping with the standard Bank of Canada practice, Mendes suggested that the central bank won't incorporate such statements until policy is actually enacted. As a result, there's no reason to expect that the Bank of Canada cuts rates more than 25 basis points next month."

On the proposed U.S. tariffs, The Canadian Federation of Independent Business (CFIB), Canada's largest association of small and medium-sized businesses with 97,000 members across every industry and region, said yesterday's tariff announcement has already sent shockwaves through Canadian markets. "Whether it's 10% or 25% -- blanket tariffs on Canadian goods would have a massive economic impact on our economy," it added.

CFIB noted small and medium-sized businesses account for approximately 40% of exports to the US.