Canadian Stocks Rise on Easing Geopolitical Risks

The S&P/TSX Composite Index gained 1.5% to close at 34,671 on Thursday after US President Donald Trump withdrew threats of military strikes against Iran, easing geopolitical concerns. The reversal came just hours before the strikes were expected to take place, as negotiations with Iran reportedly advanced to the highest levels of the country's leadership and received backing from a broad coalition of regional powers. Oil prices fell on the news, easing inflation concerns and pushing bond yields lower. Financial stocks advanced, with TD Bank rising 1.6%. Mining shares also gained as gold prices moved higher, with Agnico Eagle up 3.5% and Barrick adding 5.3%. Technology stocks were supported by a rebound in semiconductor shares following recent weakness in the sector, with Shopify gaining 2.2% and Celestica surging 6.1%. Meanwhile, Dollarama jumped 9% after reporting quarterly sales and earnings that exceeded expectations.

The S&P/TSX Composite Index gained 1% to trade near 34,500 on Thursday, led by strong gains in the retail sector. Dollarama surged nearly 9% after reporting quarterly sales and profit that topped expectations. The retailer posted net sales of C$1.85 billion in the first quarter, above forecasts of C$1.82 billion, while earnings came in at C$1.05 per share, exceeding expectations of C$0.99. Peers Loblaw (+1%) and Alimentation Couche-Tard (+2%) also advanced. Meanwhile, US President Trump said Washington would strike Iran again and increased pressure on Tehran to reach a deal. Despite the renewed rhetoric, oil prices declined, pushing bond yields lower and easing concerns over energy-driven inflation. Major banks moved higher, with RBC and TD Bank gaining more than 1%. Mining stocks also advanced as gold prices edged up, with Barrick adding 1.5%. Energy shares gained on uncertainty surrounding the normalization of oil supplies, with Imperial Oil rising nearly 2%.

Futures tracking the S&P/TSX Composite Index moved higher on Thursday after the US signaled that its strikes against Iran had concluded, paving the way for negotiations to resume. President Trump said no further retaliatory action would be needed if Iran refrains from additional attacks and added that both countries remained close to an agreement that could allow energy exports through the Persian Gulf to resume. Oil prices retreated, easing inflation concerns and pushing bond yields lower, supporting financial stocks and the broader index as fears of higher borrowing costs and hawkish central banks subsided. On Wednesday, the Bank of Canada kept interest rates unchanged, as expected. Meanwhile, Trump suggested that the US may not extend its free trade agreement with Canada and Mexico, even as negotiations with both countries continue.