Canadian stocks slipped on Monday after U.S.-Iran peace talks stalled after Iran's refusal to engage in talks following Israeli attacks on Lebanon, leaving the Strait of Hormuz blocked for oil and energy trade.
After opening a little lower than Friday's close, today the benchmark S&P/TSX Composite Index lost momentum early in the session. Despite managing to gain ground briefly, it fell again and traded lower to settle at 34,734.89, down by 34.25 points (or 0.10%).
Six of the 11 sectors posted gains today, with the IT sector leading the pack.
The indefinite delay in reaching an agreement between the U.S. and Iran to discuss ways to end the gulf war, which began on February 28, continues to move crude oil prices higher.
Despite a ceasefire proclaimed early in April to facilitate dialogue, a peace deal to end the U.S.-Israel versus Iran war remains elusive.
Last week, both nations engaged in a short skirmish in the Middle East, raising concerns of disruption to the peace talks.
However, Axios reported that a Memorandum of Understanding has been achieved with provisions to extend the ceasefire for a 60-day period during which negotiations on Iran's nuclear ambitions will take place.
In addition, once signed the MoU would lead to reopening of the Strait of Hormuz immediately. To enable this, Iran would clear all sea mines it had placed earlier. The MoU awaited U.S. President Donald Trump's approval.
On Friday, Trump stated that he would take a final call on the deal after a discussion in the Situation Room of the White House with his senior aides.
Later, Trump messaged through his social media platform Truth Social that Iran needs a deal with the U.S. that will be good for the U.S. as well. Trump reassured the nation that the ongoing efforts will work out well in the end.
Prior to this, Trump had reiterated his longstanding demand that the deal would not allow Iran to have a nuclear weapon.
Today, CBS News reported that Trump requested some edits to be made in the U.S.-Iran MoU. Those changes centered around the Strait of Hormuz as well as on the removal of near-weapons-grade enriched uranium that Iran has buried.
Complicating the talks to end the war, today U.S. Central Command stated that U.S. bases in Kuwait intercepted two Iranian missiles overnight on Monday.
Raising tensions further, Iran's Tasnim news agency reported today that following Israel's military offensive against Lebanon, Iran is halting all indirect negotiations with the U.S.
However, Axios reported quoting Ali Hamdan, top adviser to the speaker of Lebanese Parliament, Nabih Berri that Hezbollah is ready for a full and immediate ceasefire.
Assuaging concerns of re-escalation, Trump reassured that talks with Iran are continuing at a rapid pace.
In the U.S., Nvidia Corporation unveiled its first full Windows Personal Computer platform chip, RTX Spark, offering Nvidia a full computing platform for Windows laptops and compact desktops.
The new chip brings Artificial Intelligence capabilities into PCs by running AI agents locally on devices instead of routing the tasks through cloud servers.
Shares of major U.S. software companies registered gains which was reflected in Canadian IT sector too.
Data released by S&P Global revealed that Canada's Manufacturing Purchasing Managers' Index stayed at 52.90 in May, slightly down from 53.30 in April.
Friday's Gross Domestic Product data technically indicated a recession.
With the review of Canada-United States-Mexico Agreement on free trade one month away, both nations are yet to reach an agreement.
Major sectors that gained in today's trading were IT (5.97%), Energy (2.12%), Communication Services (0.50%), and Consumer Staples (0.38%).
Among the individual stocks, Coveo Solutions Inc (15.42%), Celestica Inc (10.36%), Docebo Inc (10.21%), Blackberry Limited (8.74%), Parex Resources Inc (10.27%), and Vermilion Energy Inc (6.05%) were the prominent gainers.
Major sectors that lost in today's trading were Utilities (0.53%), Consumer Discretionary (0.72%), Financials (1.33%), and Materials (1.55%).
Among the individual stocks, Equinox Gold Corp (8.19%), Orla Mining Ltd (7.95%), G Mining Ventures Corp (6.79%), Toronto-Dominion Bank (2.80%), and Gildan Activewear Inc (2.71%) 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.