Canada’s main stock index edged lower on Monday as lack of progress in U.S.-Iran peace talks dampened risk appetite, while Canadian energy producer ARC Resources’ shares jumped after Britain’s Shell agreed to a $16.4-billion deal.
At 11 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 63.70 points, or 0.19 per cent, at 33,840.41.
Work has not halted to bridge gaps between the U.S. and Iran, sources from mediator Pakistan said, despite failure of face-to-face diplomacy after President Donald Trump called off his envoys’ trip and said Iran should call when it wants a deal.
ARC’s shares rose 21.9 per cent, hitting their highest since 2014.
The energy sector led gains with a 1.8 per cent rise, mirroring higher oil prices as shipments through the Strait of Hormuz remained limited, keeping global oil supplies tight.
“Right now, it’s more about risk monitoring. Once earnings season passes, attention will shift back to the broader macro picture, including whether higher oil prices start to weigh on consumers,” said Michael Dehal, a senior portfolio manager at Dehal Investment Partners at Raymond James.
“So far, consumers are holding up, but investors are watching for any signs of consumer cracks.”
Shares of miners weighed the most on the index. B2Gold fell 7.3 per cent, while Avino Silver and Gold Mines, Pan American Silver Corp and Kinross Gold fell between 3.3 per cent and 2.7 per cent, tracking lower gold and silver prices.
Meanwhile, the Bank of Canada is expected to keep rates on hold at 2.25 per cent on Wednesday, as economists see the oil price shock from the Iran war as a short-lived move with limited impact on inflation expectations.
Money market participants are pricing in an interest-rate hike by the end of 2026, according to data compiled by LSEG.
Wall Street’s main indexes were marginally lower on Monday, ahead of a torrent of earnings this week, as stalled peace talks between the U.S. and Iran kept investors on edge.
Stocks have climbed to fresh highs in recent days on earnings optimism even as back-and-forth headlines on the U.S.-Iran war swayed sentiment.
The optimism will face a key test during the quarter’s busiest stretch of earnings this week. According to Raymond James, companies accounting for roughly 44 per cent of the S&P 500’s market capitalization are scheduled to report this week.
Of the 139 companies in the benchmark that reported as of Friday, 81.3 per cent surpassed earnings expectations, compared with the prior four-quarter average of 78.1 per cent, according to data from LSEG.
However, some analysts have questioned how reliable the results are as a guide to future performance, since they reflect only one month of disruption linked to the Middle East war.
“While earnings are now demanding a lot of focus from investors, certainly the constant drumbeat in the background is the Iranian conflict,” said Peter Andersen, founder at Andersen Capital Management.
“There doesn’t seem to be any progress on a resolution. Once the earnings period is over, investors probably will start to refocus on the Iranian conflict and what it means in the long-term impact for the equity markets.”
U.S. President Donald Trump canceled a visit by two U.S. envoys to Pakistan, dealing a new blow to peace prospects.
The Dow Jones Industrial Average fell 25.18 points, or 0.05 per cent, to 49,205.53, the S&P 500 lost 5.16 points, or 0.07 per cent, to 7,159.92 and the Nasdaq Composite lost 67.96 points, or 0.27 per cent, to 24,762.66.
The trajectory of oil prices remains the biggest unknown, as the crucial Strait of Hormuz is still closed. Brent crude futures were trading about 2 per cent higher on Monday and are 43 per cent above pre-war levels.
Investors will also hear from Federal Reserve policymakers, who will gather in Washington this week in what may be Jerome Powell’s last meeting as head of the U.S. central bank.
Republican Senator Thom Tillis said on Sunday he would allow the Senate confirmation of Fed chair nominee Kevin Warsh to go forward, after the Department of Justice dropped an investigation into Powell that Tillis said was a threat to the central bank’s independence.
“With those obstacles now removed, the path appears clearer for Warsh’s confirmation ahead of the next policy meeting (in June),” said Jefferies’ chief U.S. economist Thomas Simons.
A Reuters poll of economists last week showed that the Fed is expected to wait at least six months before cutting interest rates this year.
Four of the eleven main S&P sectors were in the red, with the S&P 500 consumer discretionary leading losses with a 0.9 per cent drop.
Qualcomm was up 2.2 per cent after an analyst said OpenAI was working with the chip designer and Taiwan’s MediaTek to develop smartphone processors.
Microsoft declined 1.2 per cent after OpenAI said on Monday that the cloud computing provider will not have exclusive access to its artificial intelligence models and products.
Domino’s Pizza dropped 10.3 per cent after the pizza chain missed first-quarter sales estimates.
Nvidia gained 0.6 per cent after jumping 4.3 per cent in the previous session. The company has reclaimed a market valuation above US$5-trillion.
Reuters