Canada's main stock index ended lower on Thursday as investors continued to chew on the latest interest rate announcement out of the U.S. and the ripple effects of the Israel-Iran conflict.
The S&P/TSX composite index was down 53.85 points at 26,506.00. U.S. stock and commodities markets are closed for the Juneteenth holiday.
On Wednesday, the U.S. Federal Reserve opted to keep its key interest rate unchanged as it tallies up the impact of U.S. President Donald Trump's tariffs. Fed policy-makers signalled they still expect to cut rates twice this year.
"They've given themselves full flexibility really to react however they would like," said Tamsin Wilding, principal and portfolio manager of fixed income at Leith Wheeler Investment Counsel Ltd.
"They did that through their forecast by both downgrading the growth forecast but upgrading or increasing the inflation forecast."
Another narrative driving markets on Thursday was the worsening hostilities between Iran and Israel as the two countries continued to exchange attacks.
Trump said he'd decide within two weeks whether the U.S. would directly attack Iran, keeping the door open to diplomacy on Tehran's nuclear program in the meantime.
"There's certainly some caution and some wariness embedded when you're facing the geopolitical situation like that," said Wilding.
"And so there's just a little bit of jumpiness around the markets on the headline."
Meanwhile on the Canadian stock market, shares of Empire Co. Ltd. jumped 5.3 per cent after reporting improved quarterly results from a year earlier.
The operator of Sobeys and Safeway grocery stores earned a profit attributable to owners of the company of $173 million or 74 cents per diluted share for the quarter ended May 3. The result was up from a profit of $149 million or 61 cents per diluted share a year ago.
Empire president and CEO Michael Medline also told an analyst conference call the company’s internal inflation calculations during the quarter were "way under" food inflation in Statistics Canada's consumer price index.
Meanwhile, Bank of Montreal shares closed down by almost one percentage point after announcing it signed a deal to buy Toronto-based Burgundy Asset Management for $625 million.
The Canadian dollar traded for 72.87 cents US compared with 73.14 cents US on Wednesday.
This report by The Canadian Press was first published June 19, 2025.
Companies in this story: (TSX: GSPTSE, TSX: CADUSD, TSX: EMP. A, TSX: BMO)
Lauren Krugel, The Canadian Press
