TSX Hits Three-Week Low

The S&P/TSX Composite Index shed 0.8% to close at 34,151, a three-week low, reflecting a broader risk-off tone as tensions in the Middle East escalated. US President Donald Trump vowed to strike Iran forcefully if a peace deal is not reached, raising the risk of further hostilities after some of the most significant clashes in two months. Meanwhile, the Bank of Canada held interest rates steady as expected, citing mixed domestic economic signals, though markets continue to price in a 25bps rate hike by year-end. Financial stocks were broadly weaker, with Brookfield slipping 1.9%. Mining shares declined as gold prices eased, with Agnico Eagle down 4.7%, Barrick losing 5%, and WPM shedding 4.4%. Shopify fell 2.1%, tracking global losses in AI-related stocks. On the upside, Apotex closed 12.5% above its C$24 IPO price. Energy shares gained on higher oil prices, with Cenovus up 2.7% and Canadian Natural adding 1.9%.

The S&P/TSX Composite Index edged lower to trade below 34,500 on Wednesday, reflecting a broader risk-off tone as tensions in the Middle East escalated. The US struck targets in Iran in retaliation for an attack on a helicopter near the Strait of Hormuz, while Iran responded with strikes on US bases in Kuwait and Bahrain. Meanwhile, the Bank of Canada held interest rates steady as expected, citing mixed domestic economic signals, though markets continue to expect a 25bps rate hike by year-end. Financial stocks were broadly weaker, with Brookfield slipping nearly 1%. Technology shares also remained under pressure amid fading enthusiasm around AI, with Shopify down almost 2%. Mining stocks declined as gold prices eased, with Agnico Eagle and Wheaton Precious Metals losing around 2% and Barrick Gold falling 1.5%. In contrast, energy stocks outperformed, supported by higher crude prices. Canadian Natural and Suncor each gained about 1%, while Cenovus advanced more than 1.5%.

Futures tracking the S&P/TSX Composite Index fell on Wednesday, weighed down by escalating tensions in the Middle East. The US struck targets in Iran in retaliation for an attack on a helicopter near the Strait of Hormuz, while Iran launched attacks on US bases in Kuwait and Bahrain. The renewed exchange of strikes threatened prospects for a deal to end the conflict and reopen the Strait. Oil prices rose in response, fueling concerns about inflation and a more hawkish Bank of Canada, weighing on banks and the broader index. Meanwhile, gold prices fell on expectations of tighter US monetary policy, pressuring mining shares. Technology stocks also remained under pressure amid fading enthusiasm for AI. Investors are awaiting the Bank of Canada's policy decision, with the central bank expected to keep rates unchanged.