By Sruthi Shankar and Sudeshna Ghoshal

Canada's main stock index fell on Monday as caution ahead of a review of the U.S.-Canada-Mexico trade agreement and weakness in gold miners offset relief from signs of easing tensions in the Middle East.

The Toronto Stock Exchange's S&P/TSX Composite index TSX:TSX was down 0.33% at 34,865.17 points by 10:06 a.m. ET.

  • Iran and the United States agreed to renew talks amid rising tensions in the Strait of Hormuz, a U.S. official said on Sunday, raising hopes of saving an interim peace deal that has been under pressure from days of tit-for-tat strikes.

  • Canadian officials are set to meet their Mexican and U.S. counterparts on Wednesday for the first trilateral meeting to review the U.S.-Canada-Mexico trade agreement. The three countries need to approve a renewal of their existing agreement or signal their ​intent to exit the pact.

  • Oil prices were steady, with Brent crude ICEEUR:BRN1! trading at above $72 a barrel after sharp falls recently.

  • Gold miners (.SPTTGD) stumbled 2.2% as the yellow metal fell nearly against a stronger dollar.

  • Broadly, a rally in commodity prices this year has helped push the resource-heavy S&P/TSX Composite index TSX:TSX to record highs. The index is on track for its eighth consecutive quarter of gains.U.S. President Donald Trump has said that the United States would do better without the USMCA on trade.

  • "Canada has been very much moving in a way with the expectation that we perhaps do not renew the deal with the United States," said Shiraz Ahmed, founder at Sartorial Wealth.

  • "There is a good potential that we can come out of this as a stronger entity. But in the meantime, there could be some pain in the short term while this goes on."

  • Key domestic data expected this week includes April's GDP numbers and S&P Global's June manufacturing activity survey. Meanwhile, traders expect the Bank of Canada to keep interest rates on hold through most of the year but see about a 30% chance of a 25-basis-point rate hike in December.

  • Investors will also closely watch U.S. data, such as the June non-farm payrolls report and factory activity surveys, for cues on monetary policy outlook.