Canadian Stocks Slide Amid Renewed Middle East Tensions Following Fresh Houthi Attacks
(RTTNews) - Partially offsetting the gains from the last two sessions, Canadian stocks edged lower on Thursday after Yemen's Houthi rebels launched strikes on two Saudi Arabian vessels in the Red Sea. A consequent surge in crude oil prices rekindled inflationary concerns while investors assessed the ongoing stalemate in Canada-U.S. trade relations.
After opening below yesterday's close, today the benchmark S&P/TSX Composite Index gained momentum early in the session but turned lower and traded firmly negative throughout the rest of the session before settling at 36,136.31, down by 10.11 points (or 0.03%).
Three of the 11 sectors posted gains today, with the Communication Services sector leading the pack.
Aside from tariff threats, the Canadian economy stands impacted by the uncertainty prevailing in the Middle East crisis.
On Tuesday, Trump stated that negotiations between the U.S. and Iran were going on well and expressed optimistically that the Strait of Hormuz will reopen very soon.
Separately, U.S. Secretary of State Marco Rubio and U.S. Treasury Secretary Scott Bessent echoed Trump's message.
However, today, U.S. Vice President JD Vance stated that the Iranians are extremely difficult to handle and hence the talks could take some time to reach to a deal. He also remarked that a faction of the ruling Iranian regime wants the war to continue.
Iran's Foreign Ministry Spokesperson Esmaeil Baghaei stated that Iran and Oman have reached an understanding on the geographic coordinates for a shipping route through the Strait of Hormuz. However, Baghaei insisted that the agreement alone would not guarantee security in the strategic waterway.
Reuters reported that Iran had warned gulf states it could target their oil, power, and water infrastructure if they fail to convince Trump to end any planned strikes on Iran and stick to the diplomatic route to resolve the crisis.
Elsewhere in the gulf, the Iran-aligned Houthi militant group of Yemen launched strikes on two Saudi Arabian oil tankers in the Red Sea.
The renewed Middle East supply related concerns pushed crude oil prices over 2.5%.
On Sunday, aboard Air Force One, U.S. President Donald Trump stated that he would soon outline a punishment to Canada for mismanaging its wildfires.
In July, Trump accused that Canadian government of not properly maintaining its forests and the frequent wildfires and the resultant smoke is invading the U.S. and polluting the quality of air.
Calling this an act of willful negligence, Trump stressed that the cost of damages in the U.S. due to this pollution must be added to Canadian tariffs.
The Canadian Interagency Forest Fire Centre reported 904 active fires across Ontario, Quebec, and other provinces, and classified more than 200 as "out of control."
However, wildfire experts stated that there is nothing that Canada can do about these fires that caused the smoke to travel thousands of kilometers.
Already, the Trump administration slapped a 50% tariff on a wide range of Canadian exports to the U.S. These taxes, which include a variety of goods including wine, hockey sticks, cement, etc., are set to take effect from August 19.
Canada's Prime Minister Mark Carney stated that he had spoken to Trump, and reassured to intensify trade talks with the U.S. to reduce growing trade tensions.
On July 1, the U.S. refused to renew the Canada-United States-Mexico Agreement for free trade. The pact had earlier provided an escape route for Canadian exports to bypass 2025 U.S. tariffs which is now closed.
Major sectors that gained in today's trading were Communication Services (2.72%), Energy (0.63%), and Materials (0.52%).
Among the individual stocks, Curaleaf Holdings Inc (10.42%), Quebecor Inc (5.94%), BCE Inc (3.27%), Rogers Communications Inc (2.17%), Paramount Resources Ltd (9.55%), International Petroleum Corporation (5.97%), Orla Mining Ltd (7.34%), and Allied Gold Corporation (5.27%) were the prominent gainers.
Major sectors that lost in today's trading were Consumer Staples (%), IT (1.49%), Real Estate (1.64%), and Consumer Discretionary (1.83%).
Among the individual stocks, Magna International Inc (5.36%), Linamar Corp (4.32%), Dream Industrial REIT (2.98%), Celestica Inc (12.96%), and Premium Brands Holdings Corporation (14.29%) were the notable losers.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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