Canadian Stocks Edge Higher Amid Easing Middle East Tensions

(RTTNews) - Canadian stocks advanced on Monday, extending the gains from Friday's session after a pause in the U.S.-Iran attacks over the weekend raised expectations of a diplomatic solution to the Middle East conflict.

After opening higher than the previous week's close, today the benchmark S&P/TSX Composite Index remained volatile throughout the session but gained momentum later before settling at 35,568.14, up by 199.04 points (or 0.56%).

Nine of the 11 sectors posted gains today, with the information technology sector leading the pack.

The gulf tension that escalated after the U.S. and Iran recommenced their mutual attacks over the past two weeks eased after the U.S. held back fresh strikes on Iranian targets. The U.S. military bombarded Iran for 13 consecutive nights until before last Friday.

Last week, U.S. President Donald Trump announced that he was contemplating a massive strike and Iran stated that it would hit back forcibly, triggering concerns of a devastating war in the Middle East.

However, citing two sources, Axios reported that the Commander of U.S. Central Command Admiral Bradford Cooper highlighted to the U.S. administration that with U.S. forces already concluding hitting several targets and any further strike would not offer any significant benefit. Two weeks of continuous strikes had already crippled Iran's ability to strike at commercial vessels transiting through the Strait of Hormuz.

In addition, the Chairman of the Joint Chiefs of Staff General Dan Caine warned Trump and U.S. Defense Secretary Pete Hegseth about the depletion in the number of air defense interceptors weakening the position of U.S. forces to protect themselves or U.S. allies in case of an escalation.

Following this, Trump suspended his planned strikes on Iran.

Today, on the way to Michigan aboard Air Force One, Trump stated that he has plenty of time to deal with Iran. Trump stated that the U.S. was in talks with Iran and expressed optimism that something good could happen.

Later in an interview with Axios, Trump stated that he paused the attacks to offer negotiations another chance. However, he added that he may return to expanded military actions if diplomacy fails.

For three consecutive nights, the situation is calm in the Middle East after nearly two weeks of attacks.

As a result of the de-escalation, crude oil prices plunged by more than 6% and boosted risk appetite, and energy sector plummeted today weighing on the index.

Investors are awaiting to analyze U.S. Federal Reserve Chair Kevin Warsh's address after the two-day policy meeting of the Federal Reserve which concludes on Wednesday to derive clues on the central bank's outlook on the economy.

Investors are looking for the details of the negotiation plan that Prime Minister Mark Carney outlined last week regarding the trade ties between Canada and the U.S.

Last Monday, Trump announced imposing 50% tariffs on various Canadian imports into the U.S. The levies are expected to take effect from August 19. In response, Carney stated that if an agreement cannot be reached before the taxes kick in, Canada can do a full range of things.

Prior to this, on July 1, the U.S. administration refused to renew the Canada-United States-Mexico Agreement for free trade. Instead, the U.S. government opted for an extension until 2036 with mandatory annual reviews.

Major sectors that gained in today's trading were IT (6.85%), Consumer Discretionary (2.16%), Consumer Staples (1.15%), Communication Services (0.79%), and Real Estate (0.65%).

Among the individual stocks, Shopify Inc (11.64%), Kinaxis Inc (6.56%), Constellation Software Inc (6.38%), Open Text Corporation (5.74%), and Restaurant Brands International Inc (2.86%) were the prominent gainers.

Major sectors that lost in today's trading were Utilities (1.16%) and Energy (2.90%).

Among the individual stocks, Brookfield Renewable Partners (2.98%), Northland Power Inc (2.04%), Transalta Corporation (1.87%), Capital Power Corporation (1.71%), Vermilion Energy Inc (5.85%), Spartan Delta Corp (4.79%) were the notable losers.

Thomson Reuters Corporation (8.57%) and WSP Global Inc (6.97%) were among the prime market-moving stocks today.