Canadian Stocks Slide Amid Persisting Middle East Tensions, GDP Data Release

(RTTNews) - Reversing the gains from yesterday, Canadian stocks moved lower on Friday as investors assessed the stronger-than-expected Gross Domestic Product data release while a slump in both the gold-linked materials and communications sectors dragged the market down.

After opening lower than yesterday's close, today the benchmark S&P/TSX Composite Index traded firmly negative before settling at 35,226.14, down by 279.70 points (or 0.79%).

Four of the 11 sectors posted gains today, with the healthcare sector leading the pack. The consumer discretionary sector remained unchanged from yesterday.

The Middle East crisis that began on February 28 continues to impact global markets.

The brief pause in the exchange of attacks between the U.S. and Iran announced by U.S. President Donald Trump last Friday to give diplomacy a chance was short-lived.

Just after four days passed without attacks, the war restarted when Iran attempted to launch strikes on the U.S. bases in Jordan. U.S. forces successfully intercepted and destroyed all Iranian ballistic missiles.

After Trump announced that Iran must be hit harder, the U.S. military concluded a heavy wave of strikes.

In retaliation, targeting U.S. bases, today Iran conducted attacks against Kuwait following yesterday's strikes in Bahrain.

Today, Iran's Islamic Revolutionary Guards Corps claimed striking two U.S.-backed vessels transiting the Strait of Hormuz. The IRGC also forced four ships to turn back.

Despite U.S. Central Command's assurance for safe passage of vessels through the strait, shipping traffic is yet to resume to pre-war levels.

With supply disruption threats unabated, crude oil prices moved higher, keeping inflation concerns alive.

After the U.S. Federal Reserve held hold the interest rates at the current level on July 29, market participants are anticipating the possibility of a rate hike in the near-term.

Gold prices slumped today and gold-linked materials sector plunged by more than 2.50%.

Data released by Statistics Canada today revealed that the Canadian Gross Domestic Product is expected to have grown by 0.20% from the previous month in June of 2026, translating to a 0.80% expansion in Q2 2026.

Goods producing industries expanded by 0.60% while services expanded by 0.20%.

The real GDP grew 0.30% in May, rising for the second consecutive month.

The Bank of Canada left its benchmark overnight rate unchanged at 2.25% on July 15.

At the time of announcement, the central bank expected growth would strengthen in Q2 2026 anticipating easing of inflationary pressures and predicted that the Canadian firms would get to adapt to the U.S. tariffs.

Under section 301 of the U.S. Trade Act of 1974, Trump imposed around 10% new levies on nearly 80 countries including Canada for failing to enforce ban on goods produced by forced labor. These taxes came into effect from last Friday.

Alleging discriminatory treatment on American goods, on July 20, Trump announced a long list of products from Canada imported by the U.S. that will face a 50% tariff. These tariffs take effect from August 19.

On the corporate front, in the Communication Services sector, Telus Corporation (T) released its Q2 2026 results. The company reported a loss of $1.8 billion or $1.17 per share for the quarter ending June 30. Telus slashed its quarterly dividend. It is set to pay shareholders 18.75 cents per share, down by nearly 55% from its previous payout of 41.84 cents per share.

Major sectors that gained in today's trading were Healthcare (1.45%), Energy (0.55%), Industrials (0.49%), and Financials (0.16%).

Among the individual stocks, Bausch Health Companies Inc (14.47%), Baytex Energy Corp (6.50%), Gildan Activewear Inc (5.77%), Parex Resources Inc (3.67%), Vermilion Energy Inc (3.47%), and Badger Infrastructure Solutions Ltd (4.43%) were the prominent gainers.

Major sectors that lost in today's trading were Consumer Staples (0.10%), Real Estate (0.71%), Utilities (0.81%), IT (2.55%), Materials (2.99%), and Communication Services (3.49%).

Among the individual stocks, Telus Corporation (11.27%), Eldorado Gold Corporation (7.80%), Southern Cross Gold Consolidated Ltd (7.50%), Aris Mining Corporation (6.16%), Centerra Gold Inc (6.12%), and Celestica Inc (5.97%) were the notable losers.