Canada's main stock index capped a good week by moving slightly higher Friday amid escalating tensions between the US and China. Benchmark U.S. crude oil fell 2% to settle at $33.25 a barrel.
China says it will impose new national security laws on Hong Kong that are expected to lead to more protests and further tension with the U.S.
Emerging market shares slid -2.72%.
Wall Street stocks finished mostly higher on Friday, concluding a positive week amid optimism about the reopening of the U.S. economy and progress on a coronavirus vaccine.
After trading lower most of the session, Wall Street trended upward in late trading, with the S&P and the Dow managing to finish higher.
"We're in a bit of a hold right now looking for the next catalyst", said Brian Levitt, global market strategist at Invesco. "It's anticipating improvement and we've seen all the bad news".
"The fact that (the market) was extending gains against what has been a deteriorating backdrop between the USA and China, I think is a testament to the emerging optimism about a recovery", said Reiman.
"The United States strongly urges Beijing to reconsider its disastrous proposal, abide by its worldwide obligations, and respect Hong Kong's high degree of autonomy, democratic institutions, and civil liberties", U.S. Secretary of State Mike Pompeo said on Friday.
The resurgent U.S. -China standoff weighed on oil prices. "If oil sells off, it's hard to have a strong stock market", said Ed Moya, senior market analyst at OANDA in NY. Energy stocks fell the most as crude oil prices headed lower after six straight gains.
"There's just too much uncertainty, and that's going to likely keep on weighing on risk appetite", Moya said. On the other hand, the defensive Real Estate Index is up 0.4%.
The Dow Jones Industrial Average fell 109.91 points to 24,364.21, while the S&P 500 slipped 5.89 points to 2,942.62 and the Nasdaq Composite Index dropped 3.96 points to 9,280.93.
Still, optimism over the US economy gradually emerging from the lockdowns have put the major indexes on course for weekly gains, with the S&P 500 set to add more than 2%.
For the week, the Dow surged 3.29% to post its best weekly performance since April 9.
Analysts said extensive central bank stimulus continues to underpin sentiment and buoy equity markets.
Crude oil futures fell 2.74% at $32.99 per barrel, Brent crude dropped 2.86% at $35.03.
Seven of the 12 TSX subgroups faded by midday, with financials poorer 1.6%, energy lagging 1.2%, and real-estate 0.9% less solid. The Japanese yen JPY= strengthened 0.01% versus the greenback at 107.62 per dollar.
European markets are mixed, with France's CAC +0.3% and Germany's DAX +0.2% but U.K.'s FTSE -0.6%; in Asia, Japan's Nikkei -0.8%, China's Shanghai Composite -1.9% and Hong Kong's Hang Seng -5.6%.