Canada’s main stock index finished slightly higher after paring losses from earlier in the day, while U.S. markets were mixed amid President Donald Trump’s latest threat against Iran.
Trump said in a social media post that a “whole civilization will die tonight” if Tehran does not meet his latest deadline to agree to a deal that includes reopening the Strait of Hormuz.
“I think what’s driving markets today is the uncertainty surrounding the Iran war and what the next move is going to be by the United States,” said Lesley Marks, chief investment officer of equities at Mackenzie Investments.
“The president has been threatening the country with significant destruction and specifically civilian destruction, and so the market is definitely concerned that this war is escalating and that there’s a lot of uncertainty around how long this war is going to last.”
The S&P/TSX composite index was up 55.55 points at 33,237.52.
In New York, the Dow Jones industrial average was down 85.42 points at 46,584.46. The S&P 500 index was up 5.02 points at 6,616.85, while the Nasdaq composite was up 21.51 points at 22,017.85.
They’re the latest swings to hit financial markets since late February because of deep uncertainty about when the fighting may end. During just the first hour of Tuesday’s trading, the Dow careened between a gain of 74 points and a loss of 425.
Oil prices were likewise shaky. The May crude oil contract was up 54 cents US at US$112.95 per barrel.
The price for a barrel of Brent crude, the international standard, eased by 0.5% to US$109.27. It’s still well above its roughly US$70 level from before the war began.
“I think what we’re seeing is a pattern of when the market is concerned about the longevity and severity of the conflict in Iran, you see oil prices rising and equities falling, and that seems to be the pattern that we’ve experienced over the last month,” Marks said.
The main worry in markets has been that a long-term disruption will keep oil prices high for a long time and send a painful wave of inflation crashing through the global economy.
So far in the war, Trump has made a series of threats to blow up Iranian power plants if it doesn’t open the Strait of Hormuz, only to delay it several times. The possibility remains that Trump could hold off on his threats again, among other scenarios.
On the TSX, the technology sector was the biggest weight on the index, while energy was in positive territory.
Separately, United States Trade Representative Jamieson Greer says he doesn’t expect negotiations on the Canada-U.S.-Mexico Agreement on trade to be resolved by July 1.
That’s the required deadline for the United States to notify its neighbours about its plans for the trilateral trade pact, known as CUSMA.
“I think the focus right now really is on the war in Iran over and above the CUSMA negotiations, but I think that will move to the forefront as we get closer to the summer and if we do see a resolution in the conflict in Iran,” Marks said.
“I think it’s a good reminder that this is another risk that is hanging out there for investors and most notably Canadian investors, especially in stocks that are particularly levered to the growth in the Canadian economy, (which) will be vulnerable to the negotiations for CUSMA.”
The Canadian dollar traded for 71.91 cents US compared with 71.86 cents US on Monday.
The June gold contract was at US$4,684.70 an ounce, unchanged from the previous day.
— With files from The Associated Press.