The S&P/TSX Composite Index advanced 0.6% on Monday to close at 36,009, driven by strength in major bank stocks. Oil prices retreated amid optimism over potential diplomatic progress between the United States and Iran. Iranian President Masoud Pezeshkian is expected to attend the UN General Assembly this week, and US President Donald Trump indicated he would be open to meeting him.
Bond yields eased as the pullback in oil prices tempered inflation concerns, providing support to credit-sensitive sectors. Financials outperformed, with notable gains among the major banks: Royal Bank of Canada (+1.8%), TD Bank (+1.5%), Bank of Montreal (+1.8%), Bank of Nova Scotia (+1.7%), and Canadian Imperial Bank of Commerce (+1.4%).
Bank of Canada Governor Tiff Macklem reiterated that monetary policy cannot reverse the effects of tariffs or directly influence gasoline prices, but emphasized that the central bank must evaluate the persistence of these shocks and their implications for inflation and economic growth.
In contrast, energy stocks weakened, with Canadian Natural Resources down 2.2% and Suncor off 2.7%. Mining shares also declined, with Wheaton Precious Metals (WPM) slipping 1.6%.
