TSX ekes out gain in choppy session as U.S.-Canada trade talks in focus

Investing.com - Canada’s main stock exchange in a choppy trading on Wednesday ended slightly higher as investors assessed the outlook for U.S. trade talks.

By 4.05 ET, the S&P/TSX 60 index standard futures contract were trading flat. 

At close, Toronto Stock Exchange’s S&P/TSX composite index gained 12 points, or 0.05% at 26,869.66. Trading resumed following the close on Tuesday in observance of the Canada Day holiday.

On Monday, hopes for a restart in sputtering trade negotiations between the U.S. and Canada helped lift the average up to a fresh record high.

The U.S. is a key market for Canada, accounting for roughly 75% of the country’s exports. Much of those items -- including goods like steel, aluminum and cars -- currently face elevated U.S. tariffs.

Ottawa moved to rescind a planned digital services tax that would have impacted large American technology companies, and had led U.S. President Donald Trump to terminate trade discussions with Canada. But, with the tax now scrapped, White House officials have said the talks will now resume.

U.S. stocks mixed

U.S. stocks were mixed following the Senate’s passage of Trump’s massive tax-and-spending bill ahead of the release of more important labor market data.

The Dow Jones Industrial Average lost 10 points, or 0.02%, to 44,484.42, theS&P 500 inched up gaining 0.46% at 6,226.63, and the NASDAQ Composite gained 190 points, or 0.94%.

The main indices traded in narrow ranges on Tuesday, eventually closing in a mixed fashion.

The Senate narrowly passed Trump’s so-called “One Big Beautiful Bill” overnight, sending it now to the House of Representatives for final approval -- with a self-imposed July 4 deadline to have the legislation on Trump’s desk looming large.

While Trump has lauded the importance of this bill, the highlight of his legislative agenda, some Republicans have balked at its potential impact on the country’s finances. Nonpartisan observers have flagged that the measures, which include the extension of Trump’s 2017 tax cuts, new tax reductions, and increased spending on defense and border security, will end up expanding the federal debt pile by over $3 trillion.

Trade deal optimism

Away from Capitol Hill, investors were looking for any progress on trade deals as Trump’s 90-day pause on his sharpest tariffs is set to expire next week.

A trade deal between the U.S. and China was announced last week, while Canada’s last-minute withdrawal of its digital services tax and talk that India was ready to ink a trade deal have boosted hopes for more agreements before Trump’s July 9 deadline.

Trump said he had no plans to extend the July 9 deadline and would instead notify countries of the tariff rates they will face through formal letters.

A Financial Times report stated on Tuesday that the U.S. is now pivoting to narrower, phased trade agreements in a bid to secure quick wins ahead of the deadline.

Crude prices jump

Crude prices were higher on Wednesday after Iran suspends cooperation with UN nuclear watchdog. 

Additionally, President Trump on Tuesday evening said Israel had agreed to the conditions needed to finalize a 60-day ceasefire with Hamas, while also urging the Palestinian group to accept the deal.

Data from the American Petroleum Institute showed on Tuesday that U.S. oil inventories grew 0.68 million barrels in the week to June 27, a build that followed five weeks of deep, outsized draws in U.S. oil stockpiles, and raised some questions over fuel demand in the travel-heavy summer season. The official government inventory report is due later on Wednesday.

At 4.05 ET,  Crude was trading up 2.73% at $67.24 a barrel.   

Gold steady

Gold prices held broadly steady after sharp gains in the past two sessions, with bullion partly supported by uncertainty over U.S. trade deals ahead of Trump’s impending tariff deadline.

The yellow metal has risen more than 2% this week so far, erasing losses from last week when Israel-Iran ceasefire reduced its safe-haven appeal.