Rising Oil Prices Boost Energy Stocks, Elevating S&P/TSX Composite
Canada’s primary stock index surged by over 200 points on Thursday, largely driven by the energy sector’s performance. This uptick in the S&P/TSX composite index came as rising oil prices heightened concerns about potential conflicts in the Middle East.
Energy Sector Driving S&P/TSX Gains
The S&P/TSX composite index increased by 205.25 points, reaching a total of 33,594.98. Much of this growth was attributed to the energy sector, spurred by escalating oil prices. The April crude oil contract rose by $1.35, hitting $66.40 per barrel.
“Energy is the big sector today, that’s why the Canadian market is doing as well as it is,” noted Pierre-Benoît Gauthier, vice-president of investment strategy at IG Wealth Management. Concerns about U.S.-Iran relations, particularly regarding Iran’s nuclear program, have added to market volatility.
Impacts of U.S.-Iran Tensions
- U.S. President Donald Trump has increased pressure on Iran.
- Iran possesses some of the world’s largest oil reserves.
- A conflict could disrupt the global oil supply chain.
Gauthier emphasized the distinction between actual market impacts and sentiment-driven movements. He indicated that while a conflict could affect supply, the current price rises are primarily sentiment-driven. “Going into 2026, I view oil prices as too cheap considering potential conflicts and global growth outlook,” he concluded.
Focused Growth in the Energy Sector
Within the TSX energy subsector, Cenovus Energy Inc. saw a robust increase of 4.04% after reporting a significant profit. The company’s fourth-quarter profit rose to $934 million, sharply up from $146 million in the previous year.
Contrast with U.S. Market Performance
In contrast, U.S. markets experienced declines. The Dow Jones industrial average fell by 267.50 points to 49,395.16. Additionally, the S&P 500 index dropped 19.42 points to 6,861.89, while the Nasdaq composite decreased by 70.91 points, closing at 22,682.73.
Notably, oil company stocks in the S&P 500 saw gains correlating with rising crude prices. However, corporate earnings announcements created mixed reactions. Walmart, for instance, displayed initial gains of 2.7% before ultimately closing with a loss of 1.4%. The retail giant’s stronger-than-expected quarterly results contrasted with an underwhelming profit forecast for the upcoming year.
Currency and Commodity Updates
The Canadian dollar was trading at 73.01 cents U.S., down from 73.11 cents U.S. the previous day. Meanwhile, the April gold contract fell by $12.10, settling at $4,997.40 per ounce.
This analysis highlights how rising oil prices are boosting energy stocks, significantly impacting the S&P/TSX Composite Index, while U.S. markets react to corporate earnings and geopolitical uncertainties.
