Extending the gains from the four previous sessions, Canadian stocks inched higher on Tuesday as investors held back risky moves and focused on how the U.S. ultimatum to Iran develops.
After opening below yesterday's close, today the benchmark S&P/TSX Composite Index traded lower early and gave further ground later to trade negative throughout much of the session before recovering late in the day to close at 33,237.52, up by 55.55 points (or 0.17%).
Five of the 11 sectors posted gains today, with the energy sector leading the pack.
The gulf war that started on February 28 is raging in its sixth week.
As has Iran effectively closed the Strait of Hormuz since the war began, oil prices have gone through the roof, pushing inflation across all major economies and prompting major central banks globally to halt interest-rate lowering plans.
Several oil tankers remain stranded at sea. Oil refiners in Asia and Europe are scrambling for crude oil.
To end the hostilities, indirect negotiations facilitated by other nations including regional neighbors of Iran did not go through as planned. While the U.S. wanted immediate opening of the strait, Iran placed several demands as a trade-off that the U.S. declined.
Frustrated by the slow progress, U.S. President Donald Trump threatened Iran to open up the strait or face drastic damages to Iran's power and energy installations as well as bridges.
Trump gave Iran a deadline until Tuesday 08:00 p.m. ET.
Top Iranian military leaders dismissed Trump's warnings.
Meanwhile, Pakistan delivered a proposal from the U.S. for a 45-day ceasefire which Iran rejected but in return gave a counterproposal.
Ahead of the ultimatum, Trump delivered his latest warning via his social media platform Truth Social stating that "a whole civilization will die" if Iran refuses to open up the seaway. Trump added that though he does not want that to happen, it probably will.
Though Trump also hinted at the likelihood of a resolution through backdoor negotiations, traders consider the chances as very slender, and therefore, concerns of a widespread war in the gulf with unimaginable magnitude are rising.
Iran's Islamic Revolutionary Guards Corps stated that it would attack beyond the gulf region if the U.S. assaults its civilian facilities and target the U.S. allies in the Persian Gulf that hosts American forces.
The U.S. struck Kharg Island, a vital hub for Iran from where 90% of it oil exports are sent to various nations.
On the data front, Canada's Ivey Purchasing Managers' Index tumbled to 49.7 in March from 56.6 in February, signaling broader economic contraction.
While speaking of the gulf conflict, Canada's Prime Minister Mark Carney stated that Canada expected all those involved in the war to follow international law, which forbids the targeting of civilians and civilian infrastructures.
In a significant development, Pakistan's Prime Minister Shehbaz Sharif asked Trump via X for a two-week extension of his deadline and simultaneously requested Iran's leadership to open up the strait as a goodwill gesture.
Sharif confirmed that diplomatic efforts to end the war were progressing steadily.
Responding to this, White House Secretary Karoline Leavitt told CNBC that Trump is aware of the proposal and added he will respond soon.
Major sectors that gained in today's trading were Energy (1.20%), Materials (0.59%), Real Estate (0.43%), and Financials (0.36%).
Among the individual stocks, International Petroleum Corporation (4.25%), Kelt Exploration Ltd (3.67%), Imperial Oil (2.26%), and Wesdome Gold Mines Ltd (6.75%), and Aris Mining Corporation (4.06%) were the prominent gainers.
Major sectors that lost in today's trading were Healthcare (2.67%), Communication Services (2.04%), Consumer Discretionary (1.13%), and IT (1.01%).
Among the individual stocks, Curaleaf Holdings Inc (7.67%), Bausch Health Companies Inc (2.53%), Rogers Communications Inc (3.45%), and Telus Corporation (2.57%) were the notable losers.
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Market Analysis
May 22, 2026 14:46 ET Minutes of the latest Fed policy session was the highlight of the week along with survey data on the U.S. housing market. In Europe, survey data signaled the trends in the euro area private sector. Further, consumer price inflation data from the U.K. was in focus. In Asia, various economic indicators from China drew attention to the health of the economy.