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Canada’s main stock index retreated from a near seven-month high on concerns that global growth will be hurt by a potential trade deal between the United States and China.

The S&P/TSX composite index closed down 63.27 points to 16,188.10 after hitting an intraday high of 16,275.31.

The Toronto market fell as the country’s largest railways and the industrial sector overall were hurt by concerns that a trade deal won’t roll back existing tariffs on Chinese imported goods, says Craig Jerusalim, portfolio manager at CIBC Asset Management.

A tariff reduction would benefit U.S. consumers but maintaining them would protect U.S. manufacturing, a key focus of U.S. President Donald Trump, he said.

“I think the rails are a proxy for global growth and international trade and any time there’s any uncertainty in either of those two factors then the rails are the economic tool for investors to reflect that sentiment,” he said in an interview.

The industrials sector was the weakest of the TSX’s 11 major sectors, losing more than one per cent. Canadian Pacific Railway shares were down 2.35 per cent while Montreal-based Canadian National Railway lost almost two per cent.

The key energy sector was the second-worst performer, losing nearly one per cent as crude prices fell from a four-month high set on Monday.

The May contract for West Texas Intermediate was down nine cents at US$59.29 per barrel and the April natural gas contract was up 2.4¢ at $2.87 per mmBTU.

“It’s still a very healthy price and a lot of the Canadian and U.S. producers are profitable at these levels and we have to remember that WTI is up 30 per cent year-to-date, so it’s won’t take much to knock a little bit off of that $59 level.”

The sector was dragged down by a more than nine per cent drop in shares of Northland Power Inc. following a $750-million secondary offering led by CIBC World Markets after the company chairman sold about half of his position following a 20.7 per cent rally this year for stock of the renewable energy company.

The market was led by a 1.55 per cent increase by the health-care sector, driven by gains by marijuana companies such as the Green Organic Dutchman Holdings Ltd.

A slightly weaker U.S. dollar due to trade concerns resulted in a firmer gold prices.

The April gold contract was up $5 at US$1,306.50 an ounce and the May copper contract was up 1.4¢ at $2.92 a pound.

The Canadian dollar traded at an average of US75.23¢, compared with an average of US74.93¢ US on Monday.

In New York, the Dow Jones industrial average was down 26.72 points at 25,887.38. The S&P 500 index was down 0.37 points at 2,832.57, while the Nasdaq composite was ahead 9.47 points at 7,723.95.

Jerusalim said markets mainly took a little pause Tuesday ahead of the federal budget being unveiled in Ottawa as investors wait for direction on some fundamental news.

He said the markets should remain flattish as long as corporate earnings continue to be a little softer than expected.

“So over the long-term the earnings growth will be supportive and the market can move higher but in the short-term I think valuations have gotten a little bit ahead of itself and I wouldn’t be surprised to see some shorter-term volatility.”