TSX Muted on Iran Stalemate

The S&P/TSX Composite Index traded muted below 34,000 on Tuesday, weighed down by stalled US-Iran negotiations. With the Strait of Hormuz effectively closed, fears of an energy shock sparking global inflation persist. Although the Bank of Canada and US Fed are expected to hold rates on Wednesday, investors worry that energy-driven stagflation could force a more hawkish stance later this year. Banks traded mixed, with BMO and the Canadian Imperial Bank of Commerce edging lower, while TD and the Royal Bank of Canada gained about 0.5%. Meanwhile, Agnico Eagle, Barrick Gold, and Wheaton Precious Metals fell 2.6%, 3.4%, and 3.3% respectively on lower gold prices. In contrast, Canadian Natural added nearly 2% on rising oil quotes, while Suncor gained 1.3%. Celestica plunged over 11% despite reporting strong Q1 2026 results. Fairfax Financial edged lower ahead of its earnings release.

Futures tracking the S&P/TSX Composite Index fell on Tuesday, weighed down by stalled US-Iran negotiations and concerns over OpenAI's performance. With the Strait of Hormuz effectively closed, fears of an energy shock sparking global inflation. Although the Bank of Canada and US Fed are expected to hold rates on Wednesday, investors worry that energy-driven stagflation could force a more hawkish stance later this year, pressuring major banks and the broader index. OpenAI's recent misses in user growth and revenue also weighed on tech peers like Shopify. Miners are set to open lower as gold prices declined. In contrast, BMO upgraded Celestica's target price following an EPS beat, and Fairfax Financial is scheduled to report results today.

The S&P/TSX Composite Index fell 0.2% to close at 33,818 on Monday as stalled US Iran peace talks dampened risk appetite ahead of a busy week of central bank meetings, including the Bank of Canada. Oil prices rose as shipments through the Strait of Hormuz remained limited, keeping global supplies tight. The Bank of Canada and US Federal Reserve are set to announce policy decisions on Wednesday. Markets expect the BoC to hold rates, but persistent geopolitical risks, oil shocks, and energy-driven stagflation fears, alongside higher bond yields and concerns over weaker credit demand, have raised speculation of a hawkish stance later this year. Financial stocks traded mixed, with Brookfield down 1.7% and Fairfax losing 2.6% ahead of its earnings release, while BMO and TD both gained 0.4%. Shopify fell 1.4% ahead of a slate of major US tech earnings. Energy producers traded higher, with Canadian Natural up 1.2% and Imperial Oil up 1% as oil prices extended gains amid supply worries.