Reversing yesterday's slide, Canadian stocks surged on Thursday as concerns of Middle East escalation diminished after U.S. President Donald Trump assured of a U.S.-Iran peace agreement soon and cancelled his earlier plans to hit Iran very hard and take control of Iran's Kharg Island.
After opening higher than yesterday's close, today the benchmark S&P/TSX Composite Index traded positive throughout the session before settling at 34,671.46, up by 520.14 points (or 1.52%).
Nine of the 11 sectors posted gains today, with the materials sector leading the pack.
The U.S.-Israel versus Iran war is in its fourth month.
Days before, following Iran's downing of a U.S. Apache helicopter that was patrolling across the Strait of Hormuz, Trump vowed to respond fiercely.
U.S. forces struck key facilities in Iran, while Iran launched counterattacks on strategic U.S. bases in Kuwait, Jordan, and Bahrain.
After criticizing Iran for delaying the negotiations aimed to reach a deal with the U.S., Trump stated that Iran will pay.
Earlier today, Trump announced via Truth Social that Iran will be hit very hard tonight by the U.S.
Trump also added that U.S. forces would take control of Iran's Kharg Island, a critical region for Iran from where it exports around 90% of its oil.
Later in an interview with Fox News, Trump reiterated that the bombing will be bigger and powerful.
In retaliation, Iranian officials closed the strait completely and warned all vessels to stay away from the waterway to avoid any attack.
With war-threat tension increasing and no end to the Hormuz crisis in sight, investors withdrew risky bets.
However, in a surprising development, a few hours before the attacks were to commence, Trump messaged via Truth Social that the highest level of Iranian leadership as well as the neighboring countries of Iran have approved the final draft of a deal with the U.S. and stated that he had called off the planned strikes. Trump added that the time and place of signing will be announced shortly.
However, Trump reiterated that the naval blockade on Iranian ports will remain in force until the deal is formally signed.
On the domestic economy, investors are focused on the Canada-United States-Mexico (CUSMA) free-trade agreement, coming up for renewal by July 1.
While the U.S. completed its talks with Mexico, a Canadian team is in the U.S. to negotiate a mutually favorable deal.
Repeating his earlier stance which he stated several months before, on Wednesday, Trump again observed that the U.S. is not eager to renew the agreement.
A majority of U.S. industries want the deal to be preserved. The pact covers around $1.30 trillion in Canada's cross-border trade with the U.S. and also guards around 90% of Canadian exports against the tariffs imposed by Trump in 2025.
On the data front, there were no significant releases except for the data released by Statistics Canada on building permits, which revealed a fall by 7.60% on a month-on-month basis to C$12.50 billion in April.
On the earnings front, Canada's retail giant Dollarama Inc (DOL) delivered the financial results for the first-quarter 2027.
While the company's revenue came at C$1.85 billion, earnings per share stood at C$1.11 and EBITDA at C$583 million. The organization declared a net earning of C$302 million.
Major sectors that gained in today's trading were Materials (4.53%), Consumer Discretionary (3.84%), IT (1.34%), Financials (1.14%), and Consumer Staples (0.45%).
Among the individual stocks, Abrasilver Resource Corp (10.69%), Energy Fuels Inc (10.48%), Silvercorp Metals Inc (9.86%), Perpetua Resources Corp (9.74%), and Dollarama Inc (9.02%) were the prominent gainers.
Energy (0.14%) and Healthcare (0.39%) were the only two major sectors that lost in today's trading.
Among the individual stocks, Birchcliff Energy Ltd (2.36%), Advantage Energy Ltd (1.48%), Vermillion Energy Inc (1.45%), Tourmaline Oil Corp (1.42%), Terravest Industries Inc (4.36%), Parex Resources Inc (2.61%), Chartwell Retirement Residences (1.84%).
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.