Canada's S&P/TSX Composite Index fell more than 1% on Monday, slipping below the 32,700 level as the deepening conflict in the Middle East triggered a pronounced shift away from risk-sensitive sectors. The tenth day of the US–Israel confrontation with Iran pushed Brent crude prices higher, lending targeted support to energy heavyweights such as Suncor Energy (up 2.3%), Canadian Natural Resources (up 1.9%), and Cenovus (up 3.4%).
These gains, however, were not enough to counter broad-based declines across financials and miners, as investors rotated into the US dollar as the preferred safe-haven asset. Major banks came under significant pressure, with Bank of Nova Scotia down 2.6% and CIBC off 2.4%, as higher bond yields and mounting fears of global stagflation darkened the outlook for credit demand.
Mining bellwethers also sold off sharply, led by a 4.4% drop in Wheaton Precious Metals and a 4.2% decline in Teck Resources, as the stronger US dollar weighed on dollar-denominated commodity prices and valuations.