Stocks bounce back from morning lows, oil off its highs
- The S&P 500 gained 0.54 points, or 0.01%, to end at 6,879.42 points, while the Nasdaq Composite gained 72.40 points, or 0.32%, to 22,740.61. The Dow Jones Industrial Average fell 86.89 points, or 0.18%, to 48,891.03.
- The S&P/TSX composite index rose 201.28 points, or 0.6%, at 34,541.2, surpassing the record close posted on Thursday. It outperformed U.S. indexes largely on the back of its heavy weighting towards the energy sector.
- Brent crude futures rose as much as 13% to US$82.37 a barrel, highest since January 2025, before settling up $4.87, or 6.7%, at US$77.74 a barrel. U.S. West Texas Intermediate crude closed at $71.23, up $4.21, or 6.3%. The benchmark at one point gained more than 12% to $75.33, highest since June.
- The initial surge in oil prices was less dramatic than some analysts had predicted, but Iran’s retaliatory attacks on other key energy-producing countries like Saudi Arabia and Qatar fanned fears that a longer, protracted back-and-forth would risk additional supply disruptions.
- The TSX energy sector gained 1.8% to reach its highest level since September 2008. Financials added 0.5% and industrials were up 1.2%. Five of the 10 major sectors ended lower, including technology, which lost 0.7%. The materials group was down 0.2% as copper prices fell.
- The Canadian dollar was down about a third of a cent to 72.97 cents US, but retraced some of those losses later. The currency move largely reflected a rise in the U.S. dollar against major currencies, benefiting from its safe-haven status. The U.S. dollar index rose 0.31% to 98.37.
- Both Canadian and U.S. government bond yields were sharply higher across the curve as investors worried about the inflationary impact the conflict would have. The yield on benchmark U.S. 10-year notes rose 8.6 basis points to 4.048%, from 3.962% late on Friday.
03/02/26 17:25
Dollar reclaims safe-haven mantle as Iran strikes rattle nerves
- Reuters
The U.S. dollar’s sharp rally following U.S. strikes on Iran is reassuring investors the currency still functions as a global safe-haven, with the greenback reclaiming its traditional crisis-era role as geopolitical tensions flare in the Middle East.
The renewed safe-haven bid comes after months of growing doubt about the dollar’s reflexive appeal during times of stress, skepticism that took root when the currency failed to rally during last year’s tariff-induced global market selloff.
On Monday, the U.S. dollar appreciated across the board, with the dollar index rising nearly 1%, its best day in seven months.
That’s welcome relief for the dollar, whose long-held status as a safe-haven asset had been challenged in recent months by the euro, the yen, as well as gold.
Lack of alternatives to the dollar makes it hard for investors to stay away in times of heightened volatility, Don Calcagni, chief investment officer at Mercer Advisors in Denver, said.
The dollar’s failure to capture safe-haven flows during last year’s market turbulence stemmed largely from the fact that the U.S. itself was the source of the risk, with Washington’s tariff offensive triggering the global selloff and leaving investors with little appetite to seek refuge in the currency of the country generating the uncertainty, analysts said.
While the dollar’s safe-haven appeal might have been dented when investors were concerned about a shock stemming from inside the U.S., when it’s an international geopolitical crisis, its safe-haven appeal seems intact, John Velis, Americas macro strategist at BNY, said.
“Certainly, the evidence today suggests that,” Velis said.
On Monday the dollar was supported not just by haven flows but also by the U.S.’s status as a net energy exporter, insulating the American economy from oil price shocks that typically hit import-dependent economies.
03/02/26 15:20
It didn’t take long for investors to buy on the dip again
- Reuters
U.S. stocks rebounded on Monday afternoon after losses in the morning, when global markets reeled following U.S.–Israeli air strikes in Iran, leaving most major exchanges abroad in the red.
Bargain-hunting U.S. investors bought on dips after the early selloff, showing an expectation that the disruptions from the conflict will be limited.
“Market participants think this is all just temporary and that the problems in the oil patch will disappear,” said Bill Smead, founder and chairman of Smead Capital Management.
The main U.S. indexes were modestly higher as the clash initially boosted defense shares and energy prices and pressured travel and interest-sensitive sectors. Later, investors ran to tech and weighed how long the Middle East conflict could run and what the conflict means for inflation and Federal Reserve policy.
Smead said investors were reverting to familiar, high-performing stocks like Nvidia, the Magnificent Seven technology stocks and defense sectors.
“When people get scared, they go back to what is comfortable,” he said.
Defence stocks also got a boost, with Lockheed Martin up 2.5% and Palantir up 5.9%, with geopolitics in the spotlight after coordinated U.S. and Israeli strikes on Iran over the weekend killed Tehran’s Supreme Leader. President Donald Trump also told CNN the “big wave” is yet to come, although some Middle Eastern countries were lobbying U.S. allies to persuade a swift end to the war.
Wall Street’s fear gauge, the CBOE VIX, eased from a three-month high hit earlier in the day and was last up 1.55 points at 21.41.
03/02/26 15:15
One reason crude’s rally has been muted: Floating oil
- Andrew Galbraith
While the price of crude oil rose in response to conflict across the Middle East, Brooke Thackray, research analyst at Global X, said one factor that might be keeping a lid on a bigger market reaction: oil stored at sea.
“When we take a look at what’s happening with floating storage ... it’s huge, absolutely huge,” Mr. Thackray said, noting in particular significant quantities of Russian oil and Chinese stockpiles that can “be tapped into if needed.”
In a December report, S&P Global cited proprietary data showing global crude storage of 93.54 million barrels in November, among the highest levels in the previous two years. That, however, made up only a small percentage of a total of 1.82 billion barrels of oil on water, most of which comprised crude in transit.
While Indian Prime Minister Narendra Modi recently agreed to stop buying Russian oil as part of a trade agreement with the United States, Mr. Thackray said that the Iran conflict may prompt a reversal.
Indian refiners may consider buying Russian oil in the event of a prolonged conflict, Reuters reported on Monday, citing sources.
03/02/26 14:35
US$22.6-billion in market value wiped out from travel stocks
- Reuters, Globe staff
Travel shares tumbled on Monday, shedding US$22.6 billion as escalating conflict between the U.S., Israel and Iran disrupted flights worldwide, closed key Middle Eastern hubs and sent oil prices surging, with analysts warning of weeks of disruption.
Data showed that at least 4,000 flights had been cancelled worldwide in the past three days.
Dubai, the world’s busiest international hub, and Doha remained shut for a third day, leaving tens of thousands of passengers stranded as aviation faced its biggest test since the COVID-19 pandemic. Jordan on Monday became the latest country in the region to partially close its airspace.
The war hit U.S. airline shares on Monday, with American Airlines and United Airlines down more than 3% in midday trading, paring losses from the morning. A group of 29 leading airlines, hotel and travel companies from Europe, Asia and North America shed a combined US$22.6 billion in market value on Monday, according to Reuters calculations.
Air Canada shares in afternoon trading were down 6 per cent.
Air Canada in a statement this afternoon said its flights from Canada to Israel and Dubai have been canceled until March 22.
Aviation analytics company Cirium said that at least 1,560 flights were cancelled on Monday worldwide, meaning more than 4,000 have been cancelled since Saturday.
Analysts highlighted rising fuel costs, cancellations and rerouting expenses as pressure points for airlines, despite hedging.
U.S. airlines do very little flying to the Middle East, with analysts at Jefferies estimating the region accounts for less than 1% of planned first-quarter capacity for American, United and Delta.
According to Jefferies, a 5% uptick in fuel costs could lower Delta and United’s 2026 earnings by 5–10% while American Airlines’ profit could plunge by about 35%.
03/02/26 12:59
Why inflation is such a big concern - beyond just the oil price
- Darcy Keith
One of the big takeaways so far of today’s market reaction is that investors see some serious risks here to the inflation outlook. The rally in oil prices is an obvious source of inflationary pressures, and the inflation-sensitive bond market is seeing some of today’s biggest moves.
But Richard Bernstein Advisors is out with a “Quick Thoughts on War” note that highlights several other risks when it comes to the inflation outlook that goes a lot deeper.
There’s also some nuggets of timely portfolio advice here from the widely respected firm:
- “It seems critically important for investors to think like investors and to ignore the political banter.”
- “War is rarely, if ever, disinflationary or deflationary because resources are typically diverted to the war effort and away from productive economic use. Of course, the duration of a war factors heavily into this point because a shorter war could result in only transitory inflation.”
- “The Vietnam War contributed to the inflationary spiral of the 1960s and 1970s. It was not the sole source of inflation, but the combination of increased defense spending and increased non-defense government spending was a definite contributor. Investors might see a similar combination again in 2026 because the recent fiscal stimulus bill will largely take effect this year.”
- “Given the US’s massive trade deficit and contracting global trade, investors should consider whether there will be supply-chain disruptions beyond the obvious disruptions in oil and gas. Air and shipping routes have already been altered. Importantly, the US did not have a massive trade deficit during the 1960s and 1970s.”
- “It is unlikely that an Iran war will turn out to be as long or as large as was the Vietnam War, but the US does seem to be on a path of a series of smaller wars. Investors should consider whether the series of smaller wars could additively contribute to inflation.”
- “The earlier Middle East wars were not inflationary because they occurred during a period of expanding globalization and increased economic competition. The reverse is happening today.”
- “Commodity-related inflation related to the war might further handcuff the Fed’s ability to cut interest rates. The nominal economy (i.e., real growth plus inflation) was already close to a 20-year high when excluding the immediate post-pandemic period, and many leading indicators of inflation have been warming.”
- “Our equity portfolios remain overweight dividends (i.e., shorter-duration equities) and non-US stocks, and we continue to avoid speculative areas of the market that are more dependent on liquidity and speculation.”
- “Our fixed-income portfolios remain focused on higher quality municipals, mortgages, and treasuries, but we maintain shorter-than-benchmark duration because of the inflation risks cited above.”
- “Gold continues to be our “spare tire” in the portfolio. Gold has historically had a meaningful correlation to uncertainty, and war increases uncertainty."
03/02/26 11:37
Markets almost completely price out another BoC rate cut this year
- Darcy Keith
Bond yields are continuing to rise as the midday hour approaches and money markets have now almost completely priced out any further interest rate cuts by the Bank of Canada this year.
Implied interest rate probabilities in overnight index swap markets now show less than 10-per-cent odds of further easing this year, according to Bloomberg data. That’s quite a change from Friday, when markets were pricing in close to a 40-per-cent probability of a quarter-point rate cut by the bank’s July 15 policy meeting. That followed a weaker-than-expected Canadian gross domestic product reading.
The Bank of Canada’s current overnight rate is 2.25 per cent. While the bank only moves the overnight rate in quarter-point increments, markets price in a much less rigid rate when setting bets on future policy rates. Right now, traders are positioned for an overnight rate of 2.23 per cent in July. By the end of this year, traders are pricing in an overnight rate of 2.29 per cent - implying some small risk of even a rate hike.
What’s behind today’s change? The spike in oil prices ignited by the conflict in the Middle East significantly increases risks of higher inflation on the near-term horizon. Under such a scenario, the bank would be very reluctant to cut rates, as such an action would likely only add to inflationary pressures.
All this is being widely seen in the bond market. Canada’s two-year and five-year bond yields are currently up 10 basis points. The two-year, which is particularly sensitive to Bank of Canada policy moves, is now at 2.495 per cent, its highest since Feb. 13.
This isn’t good news for bond portfolios, or for those hoping either fixed-term or variable mortgage rates are going to come down anytime soon.
03/02/26 11:34
Scotiabank strategist cautions against selling equities
- Scott Barlow
Scotiabank strategist Hugo Ste-Marie advises investors “don’t hit the sell button too fast” on equities as a result of military actions in the Middle East. In a research report released Sunday, he expected negative price action on Monday but also noted that a brief conflict would have very little effect on U.S. growth or inflation.
The strategist’s base case is for a short clash that does not change earnings expectations for the year. Thus market volatility could provide profitable entry points for U.S. stocks.
Mr. Ste-Marie’s bear case is for U.S. military on the ground in Iran and extensive disruption in oil and gas shipping.
The strategist is using the ratio of forward PE ratios divided by the VIX to assess market risk, and I’m going to have to think about that one for a bit.
03/02/26 11:30
Gold steadies as spotlight on Middle East conflict
Safe-haven gold steadied on Monday as profit-taking set in after prices earlier jumped more than 2% in response to concerns of a prolonged conflict in the Middle East following U.S. and Israeli strikes against Iran.
Spot gold was little changed at US$5/284.14 an ounce by 11:11 a.m. ET. It earlier hit a session high of US$5,418.50. Prices touched a record of US$5,594.82 on January 29.
U.S. gold futures rose 1 per cent to US$5,299.50.
The U.S. dollar index rose over 1 per cent, making bullion priced in dollars more expensive for other currency holders.
“Right now, the market is attempting to figure out whether these attacks are going to be followed up over the next several weeks,” said David Meger, director of metals trading at High Ridge Futures. “I think it’s that uncertainty that is more than likely to support prices.”
- Reuters
03/02/26 11:17
Economist cuts Canada’s 2026 economic growth forecast
- Scott Barlow
BofA Securities economist Carlos Capistran argued that the Canadian economy will remain weak in a Monday research report. He emphasized the quarter-over-quarter GDP contraction of 0.6 per cent in Q4, following a 2.4 per cent gain in Q3.
Mr. Capistran cut his 2026 growth forecast from 1.4 per cent to an even more anemic 1.0 per cent, citing low investment and consumption. He forecasts a hold for the Bank of Canada in March but 50 basis points of cuts in the remainder of the year.
03/02/26 10:49
TSX sits flat despite energy sector gains
Canada’s main stock index edged up on Monday, recovering from early trading losses, as gains in energy shares overshadowed broad sectoral declines triggered by worries that military conflict in the Middle East could drag on for weeks.
The S&P/TSX composite index was up 3.74 points, or 0.01 per cent, at 34,343.73 as of 10:47 a.m. ET. U.S. and Israeli strikes, followed by Iranian retaliation, have sent shockwaves across global markets as investors worry that a drawn-out regional war could push energy costs higher and disrupt business in the Gulf region.
TSX’s energy sub-index jumped 3.1 per cent after the conflict disrupted shipping in the crucial Strait of Hormuz and sent oil prices soaring.
“Markets could settle down quite rapidly unless something worse than anticipated happens,” said Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth.
- Reuters
93/02/26 10:40
Wall Street slips as investors brace for lengthy military conflict
Traders work on the floor at the New York Stock Exchange (NYSE) on Monday.Brendan McDermid/Reuters
Wall Street’s main indexes were lower on Monday as investors braced for a prolonged Middle East conflict that threatened to disrupt global trade routes and reignite inflationary pressures.
Sectors that were hit the most included airlines, as a number of carriers halted flights, while several oil and gas facilities in the Middle East stopped production, which pushed crude prices up over 8 per cent.
That painted an overall cloudy outlook for the global economy and also weighed on financial stocks.
Delta and United Airlines tumbled over 3 per cent each.
The S&P 500 financial index was down 1 per cent with big banks such as Bank of America and Citigroup trading lower.
Investors instead flocked to traditional safe havens such as the dollar. Higher precious metals prices helped miners such as Kinross Gold and Harmony Gold add 1 per cent each.
Defence stocks also got a boost, with Lockheed Martin and RTX gaining over 3 per cent each, while Kratos rose 9 per cent and AeroVironment was up 19 per cent.
After coordinated U.S. and Israeli strikes on Iran over the weekend killed Tehran’s Supreme Leader, Israel launched retaliatory attacks following air strikes by Iran and Hezbollah militants in Lebanon, deepening fears that the conflict could widen further across the region.
President Donald Trump suggested that strikes on Iran could go on for the next four weeks.
Adam Turnquist, chief technical strategist for LPL Financial, said that market losses were contained as investors had been anticipating a conflict over the past few weeks.
“The market is taking it relatively well just given where oil is and the likelihood this is going to play out for four weeks - it’s not another weekend event.”
At 9:52 a.m. ET, the Dow Jones Industrial Average fell 355.68 points, or 0.73 per cent, to 48,622.24, the S&P 500 lost 40.14 points, or 0.58 per cent, to 6,838.74 and the Nasdaq Composite lost 139.42 points, or 0.61 per cent, to 22,528.79.
- Reuters
03/02/26 09:38
North American stock indexes open lower on fears of protracted Middle East conflict
North America’s main indexes opened lower on Monday as investors braced for a prolonged Middle East conflict that threatened to disrupt global trade routes and reignite inflationary pressures.
At 9:38 a.m. ET, the S&P/TSX composite index was down 97.89 points, or 0.29 per cent, at 34,24028.
In New York, the Dow Jones Industrial Average fell 183.5 points, or 0.37 per cent, at the open to 48,794.42. The S&P 500 fell 54.5 points, or 0.79 per cent, at the open to 6,824.36, while the Nasdaq Composite dropped 346.1 points, or 1.53 per cent, to 22,322.119 at the opening bell.
- Reuters
03/02/26 09:29
Bonds do a U-turn
- Darcy Keith
North American bonds were initially seeing a solid bid this morning, keeping any rise in yields contained, but that has changed quite quickly. The benchmark US 10-year yield as of 9 am ET was up about 5 basis points, rising back above the 4-per-cent level it slipped under late last week. Across the Canadian government bond curve, yields are up about 7 basis points, a pretty hefty one-day move. Most yields have returned to levels seen last Wednesday before they softened late week.
A couple key takeaways:
- Safe-haven flows have been pretty limited so far. Traders for the most part aren’t running to the security of the bond market. If they were, yields would be slipping and prices – which move inversely – rising. Note that classic safe-haven gold is only up 3 per cent - a pretty typical move in scope for any day. The CBOE Volatility Index, the so-called Wall Street fear gauge, is up 18 per cent to 23.63 – but that’s still below levels of last November.
- And then there’s inflation. Traders have been busily debating the inflationary impact of the Middle East conflict as oil prices jump. So much will depend on the scope of the conflict and keeping the key Strait of Hormuz shipping lane open. Inflation is the worst enemy of the bond market and the most recent tick up in bond yields suggests some real concern here that the conflict will negatively impact consumers’ pocket books.
03/02/26 09:14
Canadian dollar weakens, benchmark yield climbs
The Canadian dollar weakened against the greenback on Monday, and the yield on benchmark government debt climbed.
The loonie was trading 0.3 per cent lower at $1.3682 to the greenback, or 73.09 U.S. cents, after trading in a range of $1.3638 to $1.3686.
Canadian government 10-year bond yields rose 6.6 basis points to 3.194 per cent. The yield on similar U.S. government benchmark debt rose to 4.0116 per cent.
- Reuters
03/02/26 09:04
Bank of Canada: Sometimes rate hikes needed even when economy is weak
The Bank of Canada, citing the potential for supply shocks to impose structural change, on Monday said sometimes rates needed to go up even when the economy was weak.
Deputy Governor Sharon Kozicki said that protectionist U.S. trade policies, Canada’s strained trade relationship with its neighbor and developments in artificial intelligence were structural changes that could lead to supply shocks.
“Many people may find it surprising or couterintutive that, at times, monetary policy needs to be tightened when the economy is weak. Yet that is exactly the difficult trade-off we sometimes face,” she said in a speech in Norway.
“Generally, when a supply shock is expected to have large or persistent impacts on inflation, some degree of policy restraint will be needed to bring inflation back to target.”
Ms. Kozicki said none of what she was discussing formed part of the bank’s current monetary policy deliberations. She also did not mention the U.S. and Israeli attacks on Iran.
- Reuters
03/02/26 08:56
Wall Street set for lower open on fears of protracted Middle East conflict
Wall Street’s main indexes were on track to open lower on Monday as investors braced for a prolonged Middle East conflict that threatened to disrupt global trade routes and reignite inflationary pressures.
Sectors that were hit the most in premarket trading included airlines, as a number of carriers halted flights, while several oil and gas facilities in the Middle East stopped production, which pushed crude prices up 8 per cent.
That painted an overall cloudy outlook for the global economy and also weighed on financial stocks.
Delta and United Airlines tumbled 6 per cent each in premarket trading. Big banks such as Bank of America and Citigroup slid about 2 per cent each.
Investors instead flocked to traditional safe havens such as the dollar. Higher precious metals prices helped miners such as Kinross Gold and Harmony Gold add 2 per cent each.
After coordinated U.S. and Israeli strikes on Iran over the weekend killed Tehran’s Supreme Leader, Israel launched retaliatory attacks following air strikes by Iran and Hezbollah militants in Lebanon, deepening fears that the conflict could widen further across the region.
U.S. President Donald Trump also said the conflict could stretch on for another four weeks, according to a report.
Adam Turnquist, chief technical strategist for LPL Financial, said that market losses were contained as investors had been anticipating a conflict over the past few weeks.
“The market is taking it relatively well just given where oil is and the likelihood this is going to play out for four weeks- it’s not another weekend event.”
At 8:35 a.m. ET, Dow E-minis were down 497 points, or 1.01 per cent, and S&P 500 E-minis were down 67 points, or 0.97 per cent. Nasdaq 100 E-minis were down 306.5 points, or 1.23 per cent.
Wall Street’s fear gauge, the CBOE VIX, jumped 3.08 points to a three-month high of 22.84
- Reuters
03/02/26 08:30
David Rosenberg’s best advice for panicked investors this morning
- Darcy Keith
This is one of those classic days when investors will be tempted to adjust portfolios to account for a major geopolitical shock – usually by derisking from the equity market, though oil is a particularly big focus today.
Economist David Rosenberg’s best advice as markets reopen this Monday morning? Stay calm because this too shall pass. From his Breakfast with Dave newsletter this morning:
“One piece of advice I want to hit off with is this: that we should not be shifting their portfolio around because of this latest war between the U.S., Israel, and Iran. I always say never let geopolitics get in the way of your investment decisions. Had you bet against the stock market from the last military conflict, which lasted around two weeks in June 2025, you would have made a bad decision because the S&P 500 point-to-point rallied 2 per cent and if you established a long position on oil, again, it would have been a mistake because WTI actually declined from $73 a barrel to $64 (a 12-per-cent drop). And even if you go back to Bosnia in 1995, Kosovo in 1999, Afghanistan in 2002, Iraq in 2003, Libya in 2011, and Syria in 2014, you will see that shifting your portfolio around due to geopolitics is a fool’s errand.
“Even accounting for the fact that this war with Iran is on a different scale. The shocks can sometimes generate a sharp market reaction initially, usually driven by what the oil price does, but any disruption typically is short-lived. Besides the fact that, if there is any significant disruption to the oil market, OPEC+ does have the spare capacity to fill any void (it could unleash as much as 500,000 barrels per day almost immediately). The Saudis have already been pumping in excess of 7 mbpd, the most since April 2023. The U.S. strategic reserve also holds about 415 million barrels of oil and was always intended to deal with situations that we have on our hands today, with the Straits of Hormuz effectively shuttered and shipping traffic in the Red Sea disrupted as well (remember how the SPR was deployed when Russia invaded Ukraine back in 2022).
“Whenever the markets freak out over the oil price fallout, the reaction always proves to be overdone time and again, and that is the major point. Even during the Iraq War 1 in 1990, the oil price more than doubled from $16 per barrel to $40 per barrel, and while the shock lasted around six months, we were all the way back down to around $20 per barrel by early 1991. That isn’t what triggered the 1990-1991 recession as much as the S&L crisis, the bursting of the LBO bubble, and the ensuing credit crunch.”
03/02/26 08:09
Scotia analyst sees ‘more upside ahead’ for Canadian banks
- Scott Barlow
Scotiabank analyst Mike Rizvanovic reviewed earnings season for the sector and offered a more bullish forecast,
“Another Strong Quarter For The Group With More Upside Ahead. OUR TAKE: Positive. The large banks reported a very strong Q1 overall, largely due to outsized Capital Markets, but also helped by better-than-expected NII growth on higher margins and some early signs of a pick-up in lending volumes, with PTPP earnings exceeding consensus by an impressive 6 per cent. Credit was a bit mixed this quarter with some of the banks missing expectations and evidence of further deterioration in unsecured consumer lending, although the near-term trajectory appears manageable with none of the large banks changing their F2026 PCL guidance. We exit Q1 moving our EPS forecasts up across-the-board and remain confident that the large banks are set for another year of double-digit returns, although rising geopolitical risks could certainly result in more moderate performance for the group. NA, which we believe had the best quarter among the large banks, remains our top pick, followed by CM, which also put up impressive numbers, and RY, which we believe could see some upside to its relative P/E multiple with a more uncertain outlook given recent geopolitical events. BMO and TD both had a strong Q1, but remain SP-rated. We still have a preference for the large Canadian banks over the large Canadian lifecos”
03/02/26 08:06
Citi analyst says conflict duration is key for investors
- Scott Barlow
Citi chief U.S. equity strategist Scott Chronert offered thoughts post-Middle East military events,
“Looking back at equity market reactions to military conflicts over the past 40 years, our general view is that duration of conflict is typically most critical, with the market’s discounting of expected duration next. Ultimately, we need to keep a focus on economic consequences as they create a feedback loop to fundamentals … we presume a shorter-term impact, but can’t rule out a more protracted friction to equities. We also need to bucket this new volatility event alongside a growing list of concerns. Namely, the AI spending boom seems poised to persist, but the productivity promise is quickly facing off against AI-triggered business-model disruption. This is mostly industry group specific, if not stock specific, at this junction. Still, under the surface, there is a nagging and growing concern regarding the broader labor condition, with a potential read-through to consumption, disinflation/deflation consequences, and contagion to other economic dynamics. Private credit, and equity, have emerged as a related concern with their own set of contagion risks. Where the Fed falls in this discussion is still to be determined. And it will take time to get the expected Federal Reserve head nominee, Kevin Warsh, approved and in place. Shorter term, higher oil price read-throughs to inflation may influence market perceptions of Fed Funds rate trajectory. As of this writing, we are probably more concerned about longer-term AI-influenced deflation than military conflict influence on oil price and inflation … And for all of the consternation regarding AI and the mega-cap growth cohort, the PEG ratio for the Elite 8 is approaching 10-year lows”
The Elite Eight are Nvidia (NVDA), Amazon (AMZN), Microsoft (MSFT), Alphabet (GOOG), Meta Platforms (META), Broadcom (AVGO), Tesla (TSLA)and Apple (AAPL).
03/02/26 08:03
Twelve changes to RBC Capital Markets’ portfolio of top domestic stock ideas
- Scott Barlow
RBC Capital Markets’ Canadian Fundamental Weighting portfolio saw 12 changes for the quarter,
“The Spring 202 6 FEW Portfolio contains 49 stocks , with five additions this quarter (BCE, Chorus Aviation, Franco -Nevada, IAMGOLD, Wheaton Precious Metals ) , five weighting increases (Cameco, EQB, Fairfax Financial, OR Royalties, TD Bank ) , seven deletion s (Agnico Eagle Mines, ARC Resources, Lumine, National Bank, Sun Life, Superior Plus, TELUS ) and two weighting decrease s (Constellation Software, Shopify ) . In this report, we provide an overview of the portfolio and rationale for the changes this quarter, historical performance, and a summary of our analysts’ investment for each stock selection under coverage. Portfolio Performance Over the past three months, the New Year 2026 FEW Portfolio generated a total return of 6.4 per cent, below the S&P/TSX Composite Index at 10.1 per cent. The top -performing stock selections during this period were Agnico Eagle Mines (40.9 per cent), Alamos Gold (40.2 per cent) and Teck Resources (34.9 per cent). Since inception in 1986, the portfolio has delivered a total compound annual return of 11.2 per cent, above the benchmark’s return of 9.1 per cent”
The portfolio is now BCE Inc. (BCE), Rogers Communications Inc. (RCI.B), Canadian Tire Corporation (CTC.A), Dollarama Inc. (DOL), Alimentation Couche-Tard Inc. (ATD), Loblaw Companies Limited (L), Cameco Corporation (CCO), Enbridge Inc. (ENB), Keyera Corp. (KEY), Pembina Pipeline Corporation (PPL), PrairieSky Royalty Ltd. (PSK), Suncor Energy Inc. (SU), Brookfield Corporation (BN), CIBC (CM), EQB Inc. (EQB), Fairfax Financial Holdings Limited (FFH), Manulife Financial Corporation (MFC), TD Bank (TD), Chartwell Retirement Residences (CSH.UN), DRI Healthcare Trust (DHT.UN), AtkinsRéalis Group Inc. (ATRL), Boyd Group Services Inc (BYD), Canadian National Railway Company (CNR), Canadian Pacific Kansas City Limited (CP), Cargojet Inc. (CJT), Chorus Aviation Inc. (CHR), Element Fleet Management Corp. (EFN), RB Global, Inc. (RBA), WSP Global Inc. (WSP), Constellation Software Inc. (CSU), Kinaxis Inc. (KXS), Shopify Inc. (SHOP), Alamos Gold Inc. (AGI), Artemis Gold Inc. (ARTG), Barrick Mining Corporation (ABX), Capstone Copper Corp. (CS), Franco-Nevada Corporation (FBN), IAMGOLD Corporation, Interfor Corporation (IFP), OR Royalties Inc. (OR), Teck Resources Limited (TECK.B), Wheaton Precious Metals Corp. (WPM), FirstCapital REIT (FCR.UN), Granite REIT (GRT.UN), StorageVault Canada Inc. (SVI), AltaGas Ltd. (ALA), Brookfield Infrastructure Partners LP. (BIP.UN) and Emera Incorporated (EMA).
03/02/26 06:44
Monday’s analyst upgrades and downgrades
- David Leeder
While acknowledging the immediate share price reaction to Pembina Pipeline Corp. (PPL-T) “may not show it,” RBC Dominion Securities analyst Maurice Choy thinks its fourth-quarter 2025 results “delivered elements that investors who have been on the sidelines have been looking for.”
“These elements center on Pembina’s successes on the commercial front (which help improve the perceived competitiveness of its integrated value chain) and on delivering growth via incremental project FIDs,” he explained. “There remain favourable announcements ahead relating to additional project sanctionings, the delivery of ongoing developments, and the upcoming multi-year growth rate update on April 7, with these helping to firm up the investment case for Pembina’s stock.”
Read more: Here
Other companies mentioned include: Atco; AtkinsRéalis; Canadian Packers; CIBC; Cascades; Chartwell Retirement; Docebo; Endeavour Silver; Extendicare; Gildan; Granite REIT; Jamieson Wellness; Restaurant Brands; Stella-Jones
03/02/26 06:30
TSX futures fall as Middle East tensions escalate
Futures for Canada’s main stock index fell on Monday, mirroring declines in global equities as mounting tensions in the Middle East stoked fears of a conflict that could drag on for weeks.
March futures on the S&P/TSX composite index were down 0.47 per cent, as of 5:45 a.m. ET.
U.S. and Israeli strikes — and Iranian retaliation — rippled across sectors worldwide, from shipping and aviation to oil, while investors worried that a drawn-out regional war could push energy costs higher and disrupt business in the Gulf region.
U.S. President Donald Trump suggested on Sunday that the conflict with Iran could go on for the next four weeks.
Futures for U.S. stock indexes also fell, while the pan-European STOXX 600 was down 1.3 per cent.
Oil prices surged after retaliatory Iranian attacks disrupted shipping in the crucial Strait of Hormuz. Brent crude futures and U.S. West Texas Intermediate crude were up 7.8 per cent and 7.3 per cent, respectively.
- Reuters
03/02/26 06:00
Before the Bell: What every Canadian investor needs to know today
- Justin Dallaire
Oil prices surged and shares slid as military conflict in the Middle East looked set to last for weeks, threatening to upend a global economic recovery and perhaps reignite inflation.
Wall Street futures fell after all three major indexes ended decisively lower on Friday. TSX futures followed sentiment lower after Canada’s main stock index ended Friday’s session in the red.
In Canada, investors are getting results from Capstone Mining Corp., InterRent REIT, K92 Mining Inc., and Wajax Corp.
On Wall Street, markets are watching earnings from MongoDB.
Overseas, the pan-European STOXX 600 was down 1.38 per cent in morning trading. Britain’s FTSE 100 lost 0.76 per cent, Germany’s DAX fell 1.67 per cent and France’s CAC 40 gave back 1.54 per cent.
Read more: Here
03/02/26 05:14
Gold jumps more than 2 per cent as U.S.-Israel strikes on Iran spark safe-haven demand
Gold prices rose more than 2 per cent on Monday, as U.S.-Israel strikes on Iran that killed Supreme Leader Ayatollah Ali Khamenei over the weekend stoked fears of a wider conflict and added to global economic uncertainty, triggering a rush to safe havens.
Spot gold gained 2.3 per cent to US$5,395.99 an ounce as of 04:14 a.m. ET, after hitting a more than four-week high earlier in the session. The metal hit a record high of US$5,594.82 on January 29.
U.S. gold futures rose 3.1 per cent to US$5,411.40 per ounce.
“What we’re seeing is an increase in safe-haven assets, which is reflected in the gains in gold and also reflected in the losses of risk related assets, such as stocks,” said ActivTrades analyst Ricardo Evangelista.
- Reuters
03/02/26 05:07
Wall Street futures slide as Middle East conflict escalates
U.S. stock index futures fell over 1 per cent on Monday, with investors increasingly pricing in the prospect that the conflict in the Middle East could persist for weeks, potentially disrupting global trade flows and adding to inflationary pressures.
At 4:17 a.m. ET, Dow E-minis were down 572 points, or 1.17 per cent, S&P 500 E-minis were down 75.75 points, or 1.1 per cent, and Nasdaq 100 E-minis were down 364.5 points, or 1.46 per cent.
Wall Street’s fear gauge, the CBOE VIX index jumped 3.84 points to a three-month high of 23.7.
Sectors that were hit the most in premarket trading included airlines, as several carriers halted flights and crude prices shot up 8 per cent, while an overall cloudy outlook for the global economy weighed on financial stocks.
Delta and United Airlines tumbled over 5 per cent each in premarket trading. Big banks such as Bank of America and Citigroup slid over 2 per cent each.
Investors instead flocked to traditional safe havens such as the dollar, while higher precious metal prices helped miners such as Gold Fields gain 3.6 per cent and Barrick Mining added 2.8 per cent.
- Reuters
03/02/26 05:01
Oil surges 8 per cent as Iran conflict disrupts Middle Eastern flows
Oil surged 9 per cent on Monday after retaliatory Iranian attacks disrupted shipping in the crucial Strait of Hormuz following the weekend’s bombing by Israel and the United States that killed Iranian Supreme Leader Ali Khamenei.
A sustained jump in prices would threaten a global economic recovery, spur inflation and could push up U.S. retail gasoline prices, a risky result for President Donald Trump ahead of midterm elections this November.
The price surge on the restart of trading after the weekend, however, was less than some analyst predictions.
Brent crude futures rose as much as 13 per cent to USUS$82.37 a barrel, their highest since January 2025, before retreating to trade up USUS$6.00, or 8.2 per cent, at USUS$78.87 a barrel by 4:19 a.m. ET.
U.S. West Texas Intermediate crude climbed to an intraday high of USUS$75.33, up more than 12 per cent and its highest since June, though it later pared gains and was up USUS$5.15, or 7.7 per cent, at USUS$72.17.
“The latest move reflects uncertainty around the scale and duration of the current conflict and recognizes that Iran’s political future may have major implications for the stability of the Middle East,” said James Hosie of Shore Capital.
- Reuters
03/02/26 04:30
Friday markets recap: TSX ends lower but posts biggest monthly gain since 2020
- Reuters, Globe staff
The original Toronto Stock Exchange building on Bay Street. The Toronto market has advanced for 10 straight months, the longest such winning streak since 2017.CHRIS HELGREN/Reuters
Canada’s main stock index gave back some of its monthly gain on Friday as declines for financial and technology shares offset gains for resource stocks, while domestic data showed the economy contracting in the fourth quarter.
The S&P/TSX Composite Index ended down 161.97 points, or 0.5 per cent, at 34,339.99, after posting a record closing high in the three previous days.
Wall Street also lost ground as worries about credit losses and artificial intelligence disruption weighed.
“There is a lot of debate about AI disruption, spending. Some of that is finding its way into financials today as there are some worries that private credit issues may be starting to emerge,” said Angelo Kourkafas, senior global investment strategist at Edward Jones. “On the flip side you have materials and energy that are doing the heavy lifting for the TSX as investors rotate into real asset businesses that are less likely to be disrupted by AI.”
For the month, the TSX added 7.6 per cent, marking its biggest monthly gain since November, 2020, as metal mining shares benefited from higher gold prices and stronger-than-expected bank earnings boosted financials.
The Toronto market has advanced for 10 straight months, the longest such winning streak since 2017.
Canada’s gross domestic product fell at an annualized pace of 0.6 per cent in the October-December quarter as manufacturers dipped heavily into inventories to meet demand, closing out the slowest year of growth for the country since 2020.
The technology sector lost 2.5 per cent on Friday, with shares of e-commerce company Shopify Inc. SHOP-T ending 4.3 per cent lower.
Financials fell 1.9 per cent, while consumer discretionary was down 1 per cent as shares of apparel company Aritzia ATZ-T dropped 7.8 per cent. Three of 10 major sectors notched gains, including energy. It added 1.2 per cent as the price of oil settled 2.8 per cent higher at USUSUS$67.02 a barrel.