Canada's main stock index reached a new milestone on Monday, with the Toronto Stock Exchange's S&P/TSX composite index closing at 35,275.64 points, up 337.79 points or 1%. According to Reuters, this eclipsed the record closing high of 34,937.85 points posted on June 4, marking the highest closing level since the index's record high. The index had previously sunk to a three-week low in the prior session as investors reacted to renewed fighting in the Middle East and the Bank of Canada's decision to keep interest rates steady. Five of 10 major sectors ended lower, including energy which lost 2.7%, while technology added 1.2% and consumer discretionary ended 0.8% higher. The materials index, which includes metal mining shares, jumped 5.2% as gold and copper prices climbed significantly.
SpaceX stock settled about 19% above its assigned price at a valuation north of $2 trillion, after the rocket maker raised $75 billion in the world's largest ever initial public offering (IPO). According to Investing.com, this historic debut provided significant momentum to the broader market, with the S&P 500 index rising 0.5% to close at 7,430.86 points, the blue-chip Dow Jones Industrial Average climbing 0.7% to finish at 51,202.29 points, and the tech-heavy NASDAQ Composite adding 0.3% to conclude at 25,888.84 points. "The S&P 500 is once again nearing fresh records as equity bulls try to prove that the latest pullback was just a slight retreat rather than a deeper correction," said José Torres, senior economist at Interactive Brokers. "Investors are increasingly confident that the appetite for ongoing artificial intelligence capital expenditures will remain strong, while a two-month low in oil prices has Wall Street convinced that this week's 4.2% inflation figure will quickly collapse back into the 3s," he added.
Oil prices settled 4.9% lower at $80.75 a barrel on Monday, as investors globally cheered a preliminary agreement to end the war in the Middle East and reopen the Strait of Hormuz. According to Reuters, Colin Cieszynski, chief market strategist at SIA Wealth Management, noted that "the planned reopening of the Strait of Hormuz and the end of the US naval blockade have helped send crude oil sharply lower, easing some of the geopolitical pressure that had recently weighed on market sentiment." This decline represents a substantial reversal from earlier gains driven by Middle East conflict concerns. Front-month Brent crude-oil futures fell 4.3% to $86.50 a barrel, with the benchmark trading below $90 for the first time since the latter half of April. The oil market had been climbing this week amid renewed geopolitical tensions in the Middle East, where a conflict has effectively closed the crucial Strait of Hormuz through which one-fifth of the world's oil is typically transported. President Trump on Thursday significantly boosted peace deal hopes after suggesting that an agreement had been largely finalized and approved and could be signed soon, perhaps even over the weekend.
Gold prices climbed significantly as investors sought safe-haven assets amid the geopolitical developments. According to Reuters, the materials index, which includes metal mining shares, jumped 5.2% as gold and copper prices climbed. "The planned reopening of the Strait of Hormuz and the end of the US naval blockade have helped send crude oil sharply lower, easing some of the geopolitical pressure that had recently weighed on market sentiment," said Colin Cieszynski, chief market strategist at SIA Wealth Management. "Lower oil prices could reduce pressure on central banks to hike interest rates. The Federal Reserve is due to begin a two-day policy meeting on Tuesday," he added. Gold futures are up 2.5% at $4,215.10 a troy ounce, contributing significantly to the overall market advance alongside the materials group, which includes metal mining shares, leading gains. As reported by Reuters, this sectoral strength was primarily driven by copper prices climbing 2.7% amid optimism surrounding potential Middle East peace developments.
Market sentiment was significantly boosted by ongoing peace talks between the U.S. and Iran despite recent military exchanges. According to CNN, the U.S. and Iran carried on negotiations over a potential peace deal overnight, even after they launched a second straight day of air attacks. Washington and Tehran are still in talks over a preliminary deal which would include a mechanism to unfreeze Iranian funds, as reported by Reuters, citing Iranian sources. Mehr News Agency, which is affiliated with Iranian security services, reports that major parts of the U.S.-Iran peace agreement have been finalized, citing the country's Foreign Ministry spokesman. Iran's Mehr News Agency said that a memorandum of understanding (MoU) with the U.S. would also include the release of frozen Iranian funds, adding that final negotiations would focus on nuclear and economic issues. However, discussions about Iran's missile program would be excluded, Mehr said, adding that the draft required finalization by relevant authorities. Trump on Friday berated Iran for rhetoric that he said "bears no relation to the truth," adding uncertainty to the negotiations. Iran would also "never" have a nuclear weapon under the agreement, the president added.
Mixed domestic data included manufacturing sales, which grew by 4.2% in April from March, according to Reuters. Canada's Ambassador to the United States, Mark D. Wiseman, said that discussions with Washington on reviewing the US-Mexico-Canada free trade pact were productive and respectful, as reported by Reuters. The positive trade developments come as markets continue to respond to the broader geopolitical developments, with the materials sector's strong performance driven by both commodity price gains and optimism surrounding potential Middle East peace developments. Adobe shares fell nearly 7% after the company said chief financial officer Dan Durn will leave to pursue a new professional opportunity and will be replaced by Steve Day, senior vice president of corporate finance, on an interim basis. This marked a second straight quarter with a top-level executive change for the creation software developer, after it announced in March that CEO Shantanu Narayen would step down.
