Canadian stocks edged higher on Tuesday as traders watched the developments in the U.S.-Iran standoff after reports indicated that the U.S. could restart combat operations while refraining from big moves. Gains in the oil-linked energy sector lifted the index against a pullback in the IT sector.
After opening lower than yesterday's close, today the benchmark S&P/TSX Composite Index traded lower early in the session but gained ground towards the end of the day before settling at 34,290.73, up by 151.85 points (or 0.44%).
Seven of the 11 sectors posted gains today, with the energy sector leading the pack.
The U.S.-Iran conflict entered day number 74 today.
After announcing a two-week ceasefire on April 7, U.S. President Donald Trump extended the truce to facilitate dialogue between the two nations for ending the hostilities.
After a couple of rounds of negotiations failed to yield a breakthrough, last week, the U.S. administration offered a 14-point peace proposal to Iran which the regime reviewed for a couple of days and sent its response through Pakistan to the U.S.
On Sunday, Trump announced that the plan carried by Iran's representatives was "totally unacceptable." He went on to add that Iran is continuing to play games with the U.S. for over 47 years and he will not let that happen.
Countering Trump's stance, Iran stated that the U.S. was making excessive demands and ignoring Iran's legitimate requests.
Trump also stated that the ceasefire between the U.S. and Iran is now on "life support", similar to a patient with hardly a 1% chance to live.
Citing persons close to Trump, CNN reported that he is frustrated with Iran's behavior and is planning to begin combat operations against Iran. Iran has warned that it was ready to respond to any U.S. aggression.
Expectations of an end to the ongoing gulf war diminished, compelling investors to adopt a "risk-off" mode due to an extended surge in crude oil prices.
With each side rejecting each other's outreach to end the war and with intensified exchange of verbal rhetoric, concerns of war are running high among investors who refrained from risky moves.
Investors are focusing on Trump's visit to China to attend a summit on May 14-15. Trump stated that he will have a "long talk" with Chinese President Xi Jinping about the Iran war but stressed that the U.S. does not need China's help and it will win the war "peacefully or otherwise".
Since China is the largest beneficiary of Iran's oil exports, traders still anticipate the possibility of Chinese mediation in reopening the Strait of Hormuz.
Aside from the Middle East crisis, traders are also awaiting some positive signal from the U.S.-Canada negotiations ahead of the upcoming renewal of Canada-United States-Mexico Agreement for free trade.
On the data front, it was an uneventful day for Canada with no specific releases.
Major sectors that gained in today's trading were Energy (2.39%), Consumer Staples (1.13%), Materials (0.77%), and Financials (0.38%).
Among the individual stocks, Paramount Resources Ltd (5.64%), CDN Natural Res (4.06%), Cenovus Energy Inc (3.16%), and Weston George (2.82%) were the prominent gainers.
Major sectors that lost in today's trading were Consumer Discretionary (0.02%), Real Estate (0.88%), Healthcare (1.36%), and IT (1.71%).
Among the individual stocks, Pet Valu Holdings Ltd (13.97%), Docebo Inc (8.49%), CGI Inc (3.05%), and Curaleaf Holdings Inc (2.93%) were the notable losers.
Ero Copper Corp (10.29%), Aya Gold and Silver Inc (6.65%), and Exchange Income Corporation (6.61%) were among the prime market-moving stocks today.
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Market Analysis
May 08, 2026 15:50 ET Manufacturing and services sector survey results and labor market data from main economies were the highlight on the economics news front this week. Factory orders and jobs report dominated the news flow in the U.S. Similarly, industrial production data from German garnered attention in Europe. In Asia, purchasing managers’ survey results from China and the central bank decision from Australia were in focus.