FX.co ★ TSX Falls as Higher Oil Stokes Inflation Concerns

The S&P/TSX Composite Index fell nearly 1% to below 36,000 on Monday as a renewed surge in oil prices reignited inflation worries. Crude extended its rally after US President Donald Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz, stoking fears that another energy-driven inflation shock could force interest rates to remain elevated for longer.

Bond yields climbed, adding pressure on rate- and credit-sensitive sectors. Financials retreated, with CIBC and National Bank both losing more than 0.5%. Weaker gold prices weighed heavily on miners: Agnico Eagle slumped more than 5%, while Barrick, Wheaton Precious Metals (WPM), and Franco-Nevada each dropped around 4%.

Technology names also declined in line with weakness on Wall Street, with Shopify down 3% and Constellation Software off 1.5%. By contrast, energy producers advanced on the back of higher crude prices, with Canadian Natural Resources, Cenovus, and Suncor each gaining about 1%.

Looking ahead, markets are focused on Canadian GDP figures due Tuesday, which could provide further insight into the strength of the economy and the Bank of Canada’s likely policy trajectory.