Canadian and U.S. stock markets rallied on Tuesday as financial markets seized on a couple of tenuous signals for hope about a possible end to the Iran war.
The S&P/TSX composite index was up 833.10 points at 32,768.04.
In New York, the Dow Jones industrial average was up 1,125.37 points at 46,341.51. The S&P 500 index was up 184.80 points at 6,528.52, while the Nasdaq composite was up 795.99 points at 21,590.63.
Michael Currie, senior investment adviser at TD Wealth, said oil price moves on Tuesday helped drive some of the enthusiasm in the stock market.
The May crude oil contract was down US$1.50 at US$101.38 per barrel. The price for a barrel of Brent crude oil, the international standard, fell 3.2% to settle at US$103.97.
Oil prices took a sudden and sharp turn lower in midday trading following a news report from the Middle East quoting Iran’s president Masoud Pezeshkian as saying it has “the necessary will to end the war” as long as certain requirements are met, including “guarantees to prevent a recurrence of aggression.”
Analysts said optimism entered markets overnight following a report from The Wall Street Journal saying U.S. President Donald Trump told aides he’s willing to end the U.S. military campaign against Iran even if the Strait of Hormuz remains largely closed. The strait is a narrow waterway connecting the Persian Gulf to the open ocean, and a fifth of the world’s oil sails through it on a typical day.
Tech stocks were the strongest forces lifting the U.S. market in a widespread rally where four out of every five stocks within the S&P 500 rose. Marvell Technology shot up 12.8% after Nvidia invested US$2 billion in the company and announced a partnership with it. Nvidia rose 5.6% and was the single strongest force lifting the S&P 500.
“But I think we need to take it with a grain of salt, too. Aside from oil, one of the big stories of the quarter was just the big collapse of the Mag Seven or the large-cap stocks,” Currie said.
On the Canadian stock market, gains were led by the basic materials sector.
“Gold stocks are up pretty nicely today. They’ve been suffering this month after an incredible run in the last year or so,” Currie said.
Meanwhile, investors sifted through data from Statistics Canada that suggested the economy was rebounding in the first few months of the year after a mild contraction to close 2025.
The agency said on Tuesday real gross domestic product edged up 0.1% in January, helped by strength in goods-producing industries, which expanded by 0.2%.
“It’s not that things are good, it’s just they’re not as bad as people thought they might have been,” Currie said.
The Canadian dollar traded for 71.74 cents US compared with 71.81 cents US on Monday.
The June gold contract was up US$121.10 at US$4,678.60 an ounce.