TSX pulls back from three-week high as financials, metal miners fall

* Canada's annual inflation rate rose less than expected to 3.1% in September. * Still, investors have raised their bets on a Bank of Canada interest rate hike next week after Governor Tiff Macklem said on Saturday there was increased risk that inflation broadens and becomes more persistent. * "If they were to hike, they're going to be slowing down an economy that's already moving at a snail's pace," said Allan Small, senior investment adviser at the Allan Small Financial Group with iA Private Wealth.

* Canada's economy has lost 41,200 jobs in the first nine months of the year compared with a gain of 211,300 in the same period of 2025. * Heavily weighted financials fell 0.6%, while industrials were down 1.1% as railroad shares and Air Canada lost ground. * Shares of Air Canada fell 3.2% after brokerage Jefferies cut its rating on the stock. * Interest rate sensitive stocks were a drag, with real estate down 1.3% and utilities ending 1.4% lower.

* Canada's 10-year yield climbed 12.4 basis points to 3.953%, moving back in reach of the nearly three-year high it touched earlier this month at 4.042%. * The materials sector, which includes metal mining shares, fell 1.1%. The price of gold was down 0.5%, pressured by a firm dollar and elevated US Treasury yields. * Energy was the only major sector to end higher, adding 0.5%. * US crude oil futures settled up 2.2% at $103.66 a barrel after attacks by Yemen's Iran-aligned Houthis on a Yemeni military training camp and renewed attacks on Saudi energy, airport and military facilities. (Reporting by Fergal Smith in Toronto and Anand Gopal and Utkarsh Hathi in Bengaluru; Editing by Leroy Leo and Matthew Lewis)