26.05.202620:19:03UTC+00TSX Pulls Back Amid Renewed US-Iran Tensions

The S&P/TSX Composite Index slipped 0.5% to close at 34,654 on Tuesday, retreating from a record high set in the previous session, as optimism over a potential resolution to the Middle East conflict waned following fresh US military strikes in Iran. The latest attacks have heightened uncertainty around the timing of a reopening of the Strait of Hormuz, rekindling worries about persistent inflation and the prospect of interest rates remaining higher for longer.

Financials weighed on the index, with banks trading lower: Royal Bank of Canada fell 0.7%, while TD Bank also declined 0.7%. Canada’s largest lenders will report quarterly results this week, and profits are expected to rise despite ongoing trade frictions, the Middle East conflict, and broader macroeconomic headwinds. Even so, risks linked to stretched household finances and a cooling housing market remain elevated.

Major mining names also dragged on the market as gold prices edged lower. Barrick Gold slipped 0.9%, Wheaton Precious Metals dropped 2.4%, and Agnico Eagle lost 1.7%.