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Falling commodities prices weighed on the Toronto Stock Exchange’s main index on Wednesday as U.S. markets pared back earlier losses following a report that Canada and Mexico may get a special exemption from U.S. President Donald Trump’s controversial steel and aluminum tariffs.

Major Wall Street indices had fallen sharply in late-morning trading following the departure of Gary Cohn, a top economic advisor in the White House who had been the leading internal opponent to the president’s planned protectionist policies. These include proposed tariffs of 25% on imported steel and 10% on aluminum that could be passed as early as Thursday.

“As the president’s economic adviser, Cohn was also responsible for a lot of what has happened in terms of tax reform and de-regulation,” said Allan Small, a senior investment advisor with HollisWealth Inc. “When you have a guy like that who is respected by many in the business world, that was obviously the reason why the market took a nose dive in the morning.”

But after a White House spokeswoman suggested Wednesday afternoon that the U.S.’s neighbours may receive a steel tariff exemption based on national-security considerations, U.S. stocks partially recovered to finish mixed. Investors have been hoping the White House won’t follow through on the tariffs, which they fear could ignite a trade war and damage the global economy.

In New York, the Dow Jones industrial average was down 82.76 points to 24,801.36. The S&P 500 composite index was down 1.32 points to 2,726.80 and the Nasdaq composite index was up 24.64 points to 7,396.65.

“You’re seeing the markets be able to respond to political information, political talk out of Washington, and that’s what’s controlling the markets right now,” said Small.

North of the border, the S&P/TSX composite index was down 72.58 points to 15,472.61, with the gold and energy sectors among major decliners.

The April crude contract was down by US$1.45 to US$61.15 a barrel and the April bullion contract was down by US$7.60 to US$1,327.60 an ounce.

In currency markets, the Canadian dollar closed at an average trading price of US77.24¢, down by 0.29 of a U.S. cent following the Bank of Canada’s morning decision to keep its key interest rate target on hold at 1.25%.

Elsewhere in commodities, the April natural gas contract was up by US3¢ at US$2.78 per mmBTU and the May copper contract was down by US2¢ to US$3.14 a pound.