Canadian Stocks Rebound After Sharp Selloff

The S&P/TSX Composite Index gained 0.2% to close at 34,479 on Monday, recovering modestly after posting its biggest decline in nearly four months on Friday, with energy and technology shares leading gains. Energy stocks advanced as oil prices moved higher amid persistent geopolitical risks near the Strait of Hormuz. Iran and Israel said they had halted attacks on each other following an appeal from US President Donald Trump, although Iran warned it would resume strikes if Israel continued targeting Hezbollah in Lebanon. Canadian Natural rose 1.4%, Suncor gained 1.5%, and Cenovus added 1.7%. Technology shares also outperformed, tracking gains on Wall Street after reports that Alphabet had placed a major chip order with Intel. Shopify advanced 1.2%, while Celestica climbed 3.8%. Investors also looked ahead to the Bank of Canada's policy decision on Wednesday, with rates expected to remain unchanged at 2.25%.

The S&P/TSX Composite Index gained nearly 1% to trade above 34,500 on Monday, recovering part of Friday’s decline, when the benchmark posted its largest drop since February 12th. Stable bond yields supported financial stocks and the broader market as investors took comfort from signs that weekend strikes between Iran and Israel were unlikely to trigger a broader escalation of the conflict. Banks led gains, with RBC, TD Bank, and BMO all rising around 1%. Energy shares also advanced as oil prices remained elevated despite retreating from earlier highs, with Canadian Natural gaining more than 2% and Suncor up nearly 3%. Meanwhile, gold prices were little changed, easing pressure on mining stocks. Barrick and Franco-Nevada added more than 0.6%.

The S&P/TSX Composite Index fell 2.3% to close at 34,413 on Friday as stronger-than-expected employment data from Canada and the US pushed bond yields higher and reinforced expectations that the Bank of Canada and the Federal Reserve may keep interest rates elevated for longer. Employment in Canada rose by 88,000 in May, far exceeding forecasts, while US payroll growth also surprised to the upside. Meanwhile, fading hopes for a near-term resolution to the Middle East conflict and the reopening of the Strait of Hormuz added to inflation concerns. Gold prices fell to their lowest level of 2026, triggering a sharp selloff in mining stocks. Agnico Eagle lost 7.2%, Barrick shed 7.6%, and WPM dropped 9.3%. Technology shares also came under pressure, tracking a plunge in US chipmakers after Broadcom reported AI-chip demand that fell short of lofty market expectations. Shopify fell 5.4%, while Celestica plunged 12.3%.