Canadian and U.S. markets fell on Thursday as investors saw no clear end in sight to the U.S.-Israeli war on Iran.
“I don’t think this is surprising to see the seesaw action that we’ve had since the outbreak of hostilities. It’s a fluid situation and markets are reacting given every little piece of news,” said Brent Joyce, chief investment strategist at BMO Private Wealth.
He said it appears the conflict is not over despite comments from U.S. President Donald Trump earlier in the week that the war was essentially complete.
“The main pinch point for the global economy and for markets is clearly energy getting out of the Gulf and the Strait of Hormuz,” Joyce said.
The April crude oil contract was up US$8.48 at US$95.73 per barrel. The S&P/TSX composite index was down 279.23 points at 32,840.60.
Despite the TSX’s decline, the increase in oil prices was still helping the index outperform some of its global counterparts, Joyce said, with the energy sector finishing in positive territory on the day.
Some of the biggest gains on Canada’s benchmark index came from Canadian Natural Resources Ltd. and Suncor Energy Inc., which gained 3.10% and 2.98%, respectively.
In New York, the Dow Jones industrial average was down 739.42 points at 46,677.85. The S&P 500 index was down 103.18 points at 6,672.62, while the Nasdaq composite was down 404.15 points at 22,311.98.
Worries are worsening that the war could block the production of oil in the Persian Gulf for a long time and cause a debilitating surge of inflation for the global economy.
But despite some of the recent turmoil, Joyce said markets are in wait-and-see mode, taking much of the disruptions in stride.
“Given the outbreak of hostilities, given the surge in oil prices, to only have equity markets in the U.S. down 2–3% on the year, the Canadian market is still positive by 4% on the year and not solely just driven by energy or gold … I think is a testament to what really investors need to focus on,” he said.
To be sure, stock markets have a history of bouncing back relatively quickly from military conflicts in the Middle East and elsewhere, as long as oil prices don’t stay too high for too long.
Iran’s new supreme leader released his first statement Thursday since succeeding his late father, saying his country would keep up attacks on Gulf Arab neighbours and use the effective closure of the Strait of Hormuz as leverage against the United States and Israel. A fifth of the world’s oil typically sails through the strait, and oil producers in the region are cutting production because their crude has nowhere to go.
Countries around the world are trying to make up for that, and the International Energy Agency said Wednesday that its members would release a record amount of oil, 400 million barrels, from stockpiles built for such emergencies.
But such moves are short-term fixes, and they do not clear the long-term risks. Analysts have said that if the Strait of Hormuz remains closed, oil prices could jump to US$150.
“All those releases have been announced and the price of oil went up, so these are Band-Aid solutions,” Joyce said.
The Canadian dollar traded for 73.44 cents US compared with 73.60 cents US on Wednesday.
The April gold contract was down US$53.30 at US$5,125.80 an ounce.
This report by The Canadian Press was first published March 12, 2026.
— With files from The Associated Press