Canada’s primary stock index closed higher on Monday, recovering after three straight sessions of declines last week as the price of crude moderated and risk appetite returned to markets that have been on edge over the ongoing conflict in the Middle East.
Index performance
The S&P/TSX Composite index rose 1.03%, marking its largest single-session gain since February 26 to end at 32,876.65 points. U.S. markets also opened on a firmer footing: the Dow Jones Industrial Average advanced 0.83%, the benchmark S&P 500 climbed 1.01%, and the Nasdaq Composite ticked up 1.22% at the open.
Context from last week
Major U.S. averages had slipped over the prior week after oil surged sharply on concerns that global supplies were being squeezed. The Strait of Hormuz, a strategic chokepoint south of Iran through which about a fifth of the world’s tanker traffic normally passes, has been effectively closed by Tehran, curbing energy flows and raising worries about the wider economic fallout.
Although Washington has taken steps aimed at easing supply concerns, including the temporary relaxation of some sanctions on Russian oil, crude remains elevated relative to levels before the late-February escalation of the conflict. That persistence in fuel prices has pushed up gasoline costs for consumers, a factor that feeds into headline inflation measures and is politically sensitive with U.S. voters ahead of the 2026 midterm elections.
Oil market moves
Brent crude gave back earlier gains in volatile trading but remained slightly above the $100 a barrel threshold, while U.S. West Texas Intermediate futures rose and then retreated to trade 4.4% lower at $92.62 a barrel. The swings in energy markets have been an important driver for investor positioning across equities and other asset classes.
Diplomatic and military developments
U.S. President Donald Trump has publicly urged several countries to assist in reopening the Strait of Hormuz. In remarks to reporters on Air Force One, he did not indicate whether any nations had agreed to his request. In comments to the Financial Times, he said North Atlantic Treaty Organization members should play a role and warned that "it will be a very bad for the future of NATO" if members do not respond or refuse to help.
The president singled out China, suggesting he might cancel a planned summit with Chinese President Xi Jinping in April if Beijing does not exert its influence to unblock the strait. Media reports cited in coverage indicate that some tankers bound for China have been allowed to transit the strait while others have been struck by projectiles. The Wall Street Journal, citing the European Union’s top diplomat, reported that the EU is considering options to restart shipping through the passageway. By choking off most tanker traffic, Tehran has effectively deprived large economies in Europe and Asia of key sources of energy, a development that has contributed to market nervousness.
Nvidia and the AI chip race
Beyond geopolitical tensions, attention this week is also focused on Nvidia as CEO Jensen Huang prepares to speak at the company’s annual developer conference. Investors are watching to learn what new products or strategies the artificial intelligence semiconductor leader will unveil as it seeks to preserve its edge in AI processing amid intensifying competition.
Nvidia faces rivalries from peers including Advanced Micro Devices and Intel, and from large technology firms such as Alphabet’s Google that are designing their own processors optimized for AI workloads. The industry has also seen the emergence of inference workloads that can run on different types of chips from those Nvidia traditionally sells, and some major customers have signaled they could deploy proprietary processors.
Among Nvidia’s strategic moves, the company paid $17 billion in December to acquire Groq, a specialist in fast, cost-efficient inference processing, and CEO Huang has said he will show how Groq’s technology can integrate with Nvidia’s CUDA platform. Nvidia has also invested roughly $2 billion in Lumentum and Coherent, laser manufacturers whose products can accelerate data transmission between chips, although those optical solutions are not yet produced at the scale of Nvidia’s mainstream processors. Analysts at BofA Securities expect Nvidia to announce a broadened AI product portfolio.
Meta and staffing shifts
Separately, Reuters reported over the weekend that Meta Platforms is considering deep staff reductions that could impact more than a fifth of its workforce as the company increases spending on AI infrastructure. The potential layoffs are not final and no timeline has been set, the report said, but senior executives have begun preparations and asked leaders to plan for possible reductions as Meta seeks to offset costly AI investments and capture efficiency gains from AI-assisted operations. The company’s shares rose in premarket trading by more than 3% by 05:18 ET.
Precious metals and policy risks
Spot gold steadied after a brief dip below key technical levels, with market participants watching both developments in the Iran conflict and a Federal Reserve decision later this week. Caution ahead of that central bank meeting, and concern that officials could adopt a hawkish tone in response to sticky inflation, have weighed on bullion. Spot gold was up 0.3% at $5,033.31 an ounce by 10:07 ET, while gold futures were down 0.4% at $5,040.31 an ounce after an earlier move below $5,000.
What this means for markets
Monday’s rebound in Canadian equities highlights the sensitivity of markets to energy-price dynamics and to geopolitical signals about shipping and supply. Technology and AI-related names remain a focal point for investor attention as companies outline capital and acquisition strategies intended to secure competitive positions in processor design and data-center interconnectivity. Gold’s stability reflects an ongoing balance between safe-haven demand tied to geopolitical risk and investor caution ahead of central bank guidance on inflation and interest rates.
Summary
Canada’s S&P/TSX gained 1.03% to close at 32,876.65 points as oil prices retreated from earlier highs. U.S. indexes opened higher, while investors weighed implications of the Iran-related closure of the Strait of Hormuz, U.S. diplomatic interventions, upcoming corporate announcements in the AI semiconductor sector, and reports of major workforce planning at Meta. Brent traded just above $100 a barrel and WTI was down 4.4% at $92.62 a barrel. Spot gold traded at $5,033.31 an ounce by midmorning U.S. time.
Key points
- The S&P/TSX Composite rose 1.03% to 32,876.65, recording its largest one-day gain since February 26.
- Oil retreated from earlier spikes, with Brent near $100 a barrel and WTI down 4.4% at $92.62 a barrel, easing some market strain tied to supply disruptions via the Strait of Hormuz.
- Investors are focused on Nvidia’s developer conference and corporate moves in AI, while Meta faces reports of potential large-scale layoffs as it increases AI infrastructure spending.
Risks and uncertainties
- Ongoing closure of the Strait of Hormuz remains a direct risk to global energy flows and to sectors sensitive to oil prices, including energy, transportation and consumer discretionary through fuel cost pass-throughs.
- Geopolitical responses and the degree of international cooperation to reopen shipping lanes are uncertain, leaving markets exposed to sudden shifts in oil prices and safe-haven demand across currencies and precious metals.
- Competitive dynamics in the AI chip market create execution and product-risk uncertainties for semiconductor firms and for large cloud and AI service providers that are investing in proprietary hardware or scaling data-center infrastructure.