Canadian stocks slumped on Wednesday, partially offsetting the gains from yesterday's session after new attacks in the Middle East stalled the signing of a U.S.-Iran peace agreement, delaying the reopening of the Strait of Hormuz.
After opening lower than yesterday's close, today the benchmark S&P/TSX Composite Index traded firmly negative throughout the session before settling at 34,801.54, down by 367.92 points (or 1.05%).
Five of the 11 sectors posted gains today, with the consumer staples sector leading the pack.
Last week, Axios reported that the U.S. and Iranian negotiating teams were inching closer to sign a Memorandum of Understanding to discuss measures to end the gulf war and reopen the Strait of Hormuz as early as possible. The draft awaited U.S. President Donald Trump's approval.
Later, reports indicated that Trump wanted a few edits made to the contents of the proposal centering on the Strait of Hormuz and Iran's nuclear programs.
Market participants awaited an announcement on a deal since weekend but reports of Israel intensifying its attacks on Lebanon renewed concerns of re-escalation.
Iranian news agencies reported that Iran paused talks with the U.S. to protest against Israel's attacks on Lebanon.
However, Trump rejected those claims and assured that the talks were going on uninterruptedly.
Trump also announced that he had secured a ceasefire between Israel and Lebanon and affirmed that both nations have agreed to halt attacks on each other.
Yesterday, during a five-hour testimony to the U.S. Congress, U.S. Secretary of State Marco Rubio claimed that a deal was within reach and affirmed that Iran had agreed to discuss its nuclear program. He added that any sanctions relief to Iran would come only after it gives up its nuclear ambitions.
As the U.S.-Iran war entered day number 96 today, in an interview with the New York Post, Trump stated that Iran's Supreme Leader Ayatollah Mojtaba Khamenei is also engaged in the ongoing negotiations to end the war.
Trump added that he was not in a hurry to end the crisis but accepted the possibility that the current U.S. naval blockade on Iranian ports could continue until September though he felt the crisis will resolve fairly quickly.
Today, U.S. Central Command announced that U.S. forces stationed near Iran struck a communications tower serving the Islamic Revolutionary Guards Corps, south of Qeshm Island in an act of self-defense.
Iran warned that every attack on Iran will be answered with a deluge of missiles and drones.
Iran carried out strikes on U.S. bases in Kuwait and Bahrain.
In Kuwait, a passenger terminal at Kuwait International Airport was hit, killing one and injuring more than 60 persons.
Bahrain reported successfully intercepting Iranian drones and missiles.
Following these attacks, the United Arab Emirates called for an united Gulf stance.
These new incidents renewed war concerns and diminished expectations of an earlier reopening of the Strait of Hormuz.
In a note on Canada's economy, today the Organization for Economic Cooperation and Development stated that Gross Domestic Product growth is set to rebound later in the year (to reach 1.20%) and continue to grow in 2027 (reaching 1.70%).
The OECD commented that Canada's position as a net energy exporter supports its growth but admitted that inflation could rise in the near-term.
The S&P Global Canada Composite Purchasing Managers' Index increased to 50.80 in May from 49.90 in April while the Services PMI eased to 50.70 from 51.00 of the previous month.
Major sectors that gained in today's trading were Consumer Staples (1.52%), Energy (1.19%), Consumer Discretionary (0.84%), and Communication Services (0.17%).
Among the individual stocks, Empire Company Limited (2.23%), The North West Company Inc (2.21%), Advantage Energy Ltd (4.90%), and Athabasca Oil Corp (3.14%) were the prominent gainers.
Major sectors that lost in today's trading were Industrials (0.65%), Healthcare (0.88%), Materials (3.16%), and IT (3.48%).
Among the individual stocks, Mda Space Ltd (5.88%), Cargojet Inc (3.96%), Curaleaf Holdings Inc (4.83%), Lithium Americas Corp (8.69%), and Aya Gold and Silver Inc (8.20%) were the notable losers.
Gfl Environmental Inc (3.25%) and Dpm Metals Inc (3.18%) were among the prime market-moving stocks today.
For comments and feedback contact: editorial@rttnews.com
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.