TSX Drops on US-Iran Tensions and Higher Annual Inflation

The S&P/TSX Composite Index traded near flat around the 34,000 mark on Monday, as fears of a unraveling US Iran ceasefire and elevated inflation kept markets cautious. The US seized an Iranian vessel, prompting Tehran to retaliate and reimpose its blockade on the Strait of Hormuz, with Iran ruling out further talks before the ceasefire expires April 21. Oil prices surged on renewed shipping disruptions, reigniting stagflation concerns and pressuring banks’ outlook due to higher rates and weak credit demand. Higher credit costs were also owed to the surge in the domestic inflation rate, which rose to 2.4% in March as the Middle East conflict lifted transportation costs. Still, major banks such as TD and BMO held steady. Gold miners fell as US Treasury yields rose, Agnico Eagle lost over 2.5%, and Barrick was down 2%. Energy producers rebounded with global oil prices: Canadian Natural and Suncor each gained about 1%, Cenovus added nearly 2%.

Futures tracking the S&P/TSX Composite Index fell on Monday as fears of an unraveling US Iran ceasefire rattled markets while high inflation maintained upward pressure on rates. The US seized an Iranian vessel and Tehran vowed retaliation, while Iran lifted and then reimposed its blockade on the Strait of Hormuz. Iran also ruled out a second round of negotiations before the ceasefire expires on April 21st. Oil prices surged on renewed shipping disruptions, reigniting stagflation fears and pressuring the outlook for banks due to elevated rates and low credit demand. Higher credit costs were also owed to the surge in the domestic inflation rate, which rose to 2.4% in March as the Middle East conflict lifted transportation costs. Gold miners dropped due to higher Treasury yields in the US. In turn, energy produces were set to rebound on the rebound for global oil prices.

Futures tracking the S&P/TSX Composite Index fell on Monday as fears of an unraveling US Iran ceasefire rattled markets while markets awaited the Canadian CPI. The US seized an Iranian vessel and Tehran vowed retaliation, while Iran lifted and then reimposed its blockade on the Strait of Hormuz. Iran also ruled out a second round of negotiations before the ceasefire expires on April 21st. Oil prices surged on renewed shipping disruptions, reigniting stagflation fears, lifting bond yields, and pressuring financials and the broader index. Also, gold retreated, weighing on mining stocks. Energy producers, however, are set to rebound on the oil spike.