Canadian equities fell modestly on Friday as investors assessed the U.S.-Iran memorandum signed Wednesday and the abrupt cancellation of the first round of U.S.-Iran negotiations in Switzerland, which coincided with renewed Israel‑Hezbollah hostilities.
After opening below the previous close, the S&P/TSX Composite Index initially rallied but quickly reversed direction, remaining volatile before closing at 34,857.34, down 111.92 points (0.32%).
Five of the 11 sectors posted gains, led by the energy sector.
Following the outbreak of hostilities between the United States and Iran on February 28, Iran closed the Strait of Hormuz, preventing the passage of oil and energy cargo vessels.
Consequently, heightened supply concerns drove a sharp increase in oil prices worldwide.
On Wednesday, in France, President Donald Trump signed a 14‑point memorandum of understanding with Iran, seeking to resolve the conflict through negotiations and a 60‑day ceasefire.
The memorandum was then forwarded to Iran, where President Masoud Pezeshkian signed it.
The signing had originally been scheduled at the Burgenstock Resort in Switzerland today, but Trump moved the event to Wednesday for undisclosed reasons.
The United States lifted sanctions on Iran, permitting oil sales, and rescinded the naval blockade on ships entering or leaving Iranian ports.
The agreement enabled the immediate reopening of the Strait of Hormuz, providing relief to global markets and ship owners.
Nevertheless, energy analysts warned that increased oil traffic may not quickly restore crude production to pre‑war levels.
Observers noted that clearing Iran‑planted sea mines, even under optimal conditions, could take over four months.
Additionally, insurers’ willingness to reinsure the vessels and shipowners’ consent to permit fleet operations remain uncertain.
As part of the deal, Iran also demanded an immediate halt to Israeli attacks on Lebanon.
Hezbollah killed four Israeli soldiers overnight near Nabatieh in southern Lebanon; Israel responded with airstrikes in southern Lebanon and the Bekka Valley, killing roughly 18 people.
In a forceful statement, Israel’s National Security Minister Itamar Ben‑Gvir declared that all of Lebanon must burn, noting that Trump’s agreement does not bind Israel.
Negotiations slated to commence today in Obburgen, Switzerland, were abruptly cancelled.
U.S. Vice President JD Vance cancelled his planned trip to Switzerland to begin negotiations with Iranian officials.
On Wednesday, the U.S. Federal Reserve maintained interest rates at the 3.50%‑3.75% range. Its Dot Plot signaled a near‑term higher‑rate environment, which pressured gold prices.
Following the G7 Summit in Paris on Wednesday, Trump expressed little interest in renewing the Canada‑United States‑Mexico Agreement (CUSMA).
By July 1, Canada, the United States, and Mexico must decide whether to extend CUSMA beyond its 2036 expiry, with any party able to withdraw by providing six months’ written notice.
Mexico and Canada seek an extension, whereas Trump has signaled that the agreement offers limited benefits to the United States.
Senior Canadian officials are currently in the United States to renegotiate the terms of the agreement.
Data showed the Canadian Federation of Independent Businesses’ long‑term Business Barometer index climbing to 49.60 in June from 46.30 in May, while the short‑term optimism index fell to 46.10 from 48.10.
Statistics Canada reported that retail sales rose 1.00% in May compared with the prior month, based on a preliminary estimate.
Notably, U.S. markets are closed today due to the Juneteenth federal holiday.
The sectors that declined today included Financials (0.05%), Communication Services (0.24%), Utilities (0.41%), Consumer Staples (0.65%), Healthcare (0.70%), and Materials (2.07%).
Notable decliners included Alamas Gold Inc (down 18.44%), Wheaton Precious Metals Corp (down 4.78%), Torex Gold Resources Inc (down 4.22%), and Bausch Health Companies Inc (down 2.52%).
Gainers today comprised the energy sector (up 0.67%), information technology (0.30%), industrials (0.21%), real estate (0.10%), and consumer discretionary (0.08%).
Prominent gainers included Parex Resources Inc (up 6.04%), Tamarack Valley Energy Ltd (up 3.86%), Enerflex Ltd (up 2.96%), Dye and Durham Limited (up 7.06%), and Descartes Systems (up 3.73%).
Additional market‑moving stocks included 5N Plus Inc (up 6.84%), Atkinsrealis Group Inc (up 6.44%), and Mda Space Ltd (up 6.29%).
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