FX.co ★ TSX Drops Amid Geopolitical Caution

The S&P/TSX Composite Index experienced a 0.2% decline, closing at 26,506 on Thursday. This drop was largely attributed to increasing hostilities between Israel and Iran, alongside heightened speculation about potential U.S. involvement, which contributed to rising risk aversion. In Washington, President Trump indicated that a decision on U.S. intervention would be made "within two weeks," calming immediate concerns regarding a Middle Eastern supply shock. However, his previous remarks about potentially engaging or refraining from action had already heightened geopolitical uncertainty. Concurrently, the Federal Reserve maintained current interest rates and reduced the extent of anticipated rate cuts, primarily due to increased trade tensions and risks associated with the Middle East, thus reinforcing a cautious economic policy environment. The decline was led by companies in the base-metals and precious-metals sectors, with Agnico Eagle, Wheaton Precious, and Barrick Gold seeing losses ranging from 0.5% to 1.3%. In contrast, energy producers defied this trend, benefiting from oil prices approaching multi-month highs amid ongoing concerns about supply disruptions.