TSX Slips as High Oil Prices Fuel Inflation Fears

The S&P/TSX Composite Index edged lower to trade below 36,500 on Thursday as rising oil prices fueled inflation concerns. Oil prices climbed after US President Donald Trump announced a sweeping package of economic measures targeting Iran. Financials and the broader market came under pressure as bond yields rose amid renewed inflation worries, with RBC, TD Bank and BMO shedding about 0.5% each. Gold prices fell as investors took profits following a climb to a more than two-month high, although miners remained mostly higher. Agnico Eagle gained more than 0.5%, while Barrick added nearly 1%. Meanwhile, Canadian producer prices rose 12.4% year-on-year in July, highlighting the impact of higher energy costs on wholesale prices and reinforcing the elevated yield environment. On the trade front, the US and Canada were reportedly nearing a deal.

Futures tracking Canada's stock market moved lower on Thursday as rising oil prices increased inflation concerns and falling gold prices pressured mining stocks. Oil prices climbed after US President Donald Trump announced a sweeping package of economic measures targeting Iran. Financials and the broader market came under pressure as yields rose amid inflation concerns. Gold prices fell as investors took profits following a climb to a more than two-month high, likely weighing on miners after Wednesday's rally. The Canadian producer inflation soared 12.4% in July, underscoring the impact of high energy prices on wholesale prices and in line with the elevated levels for yields. On the trade front, the US and Canada are reportedly nearing a deal.

The S&P/TSX Composite Index edged 0.1% higher to close at 36,402 on Wednesday, lifted by a rally in mining stocks. Gold prices rose to their highest level since early June, tracking a rally in long-dated US Treasuries after the Treasury Department doubled its buyback of notes and bonds for the upcoming financial quarter. Major gold miners gained up to 12%, with Agnico Eagle surging 10.5%, Barrick adding 6.7% and WPM soaring 10.4%. Meanwhile, financials weighed on the index as oil prices extended gains, fueling inflation concerns. RBC shed 3.1%, TD Bank lost 3.5%, BMO fell 4.4%, CIBC retreated 3.7% and Scotiabank dropped 3.3%. Energy stocks posted losses despite higher oil prices, with Canadian Natural down 0.7% and Suncor losing 1%. Elsewhere, US President Trump paused 50% tariffs on select Canadian goods and signaled a trade deal with Canada was near. Still, reports indicated metals would remain tariffed. Industrials posted losses, with Enbridge down 2.7%.