TSX Drops 1.5%

The S&P/TSX Composite Index tumbled 1.5% on Thursday to close at 31,888 as hardening geopolitical tensions and surging energy prices fueled global stagflation concerns. Market sentiment soured following President Trump’s warning that Iran must get serious which overshadowed previous hopes for a peace deal. The resulting 5% jump in Brent crude supported domestic energy producers with Suncor Energy and Cenovus Energy advancing 0.7%. However these gains were offset by a broad retreat in the financial and mining sectors as rising Treasury yields pressured equities. Royal Bank of Canada and TD Bank both shed over 1.2% while Bank of Montreal slumped 3.1% and CIBC lost 2.8%. Miners also faced heavy selling pressure with Agnico Eagle dropping 1.9% and Barrick Gold falling 3.8% while Cameco slid 4%. Additionally Shopify fell 2.5% as investors recalibrated growth expectations amid a higher interest rate outlook and geopolitical uncertainty.

The S&P/TSX Composite Index was muted on Thursday, trading near 32,500 as mixed Middle East war signals kept investors on edge. President Trump said Tehran wanted to strike a deal, contradicting Iran's foreign minister, who said his country was reviewing Washington's proposal but had no intention to hold talks. The conflicting signals left market participants uncertain about prospects for restoring Strait of Hormuz flows. Oil prices climbed on concerns that prolonged fighting could further disrupt energy supplies. The oil surge rekindled stagflation worries, lifting bond yields and pressuring credit demand. Despite that, most major banks inched higher: TD and RBC edged up while Brookfield advanced near 1%. Higher oil prices supported energy stocks while lower gold prices pressured miners. Canadian Natural rose 0.2% and Whitecap gained 0.7%, while Barrick fell 1%. Elsewhere, Shopify gained over 1% amid a US software stocks rally.

Futures tracking the S&P/TSX Composite Index fell on Thursday as mixed signals on the Middle East war kept investors on edge. President Trump said Tehran wanted to strike a deal, contradicting Iran's foreign minister, who said his country was reviewing Washington's proposal but had no intention to hold talks. The conflicting signals left market participants uncertain about prospects for restoring flows through the Strait of Hormuz. Oil prices climbed on concerns that prolonged fighting could further disrupt energy supplies. The oil surge rekindled stagflation worries, lifting bond yields and pressuring credit demand and major Canadian banks. Also, the conflict-driven oil rise with no clear end in sight could complicate central banks' rate outlook. In contrast, higher oil prices supported energy stocks while lower gold prices pressured miners. In other news, JPMorgan initiated coverage on Alimentation Couche-Tard with an overweight rating and downgraded TD Cowen to hold from buy.