The TSX composite fell 336.79 points, or 0.95%, to 34,935.80 Wednesday, its steepest one-day decline since June 5 and its lowest close since June 30. The index has now given back its entire gain since the June 16 record close of 35,389.58. The decline was not broad-based weakness. It was one sector rising nearly 4% while the rest of the index absorbed a sharper loss underneath it.
Two Reactions to One Catalyst
Energy stocks rose nearly 4% Wednesday after President Trump said the ceasefire with Iran was over and the U.S. revoked Iran's oil sales waiver, sending WTI crude up 5.04% to $73.99 and Brent above $78 a barrel. That is the mechanism the TSX has run on since February: a Middle East supply threat lifts Canadian energy producers directly.
The same headline pushed the other direction everywhere else. The materials sector fell 3.2% as gold prices slipped 0.7%, hitting Agnico Eagle, Barrick and Wheaton Precious Metals for losses of 2% to 3.5%. TD Bank, BMO and CIBC each fell about 1%, and Brookfield lost 2%, as the 10-year Government of Canada bond yield rose as much as 9.5 basis points to 3.590%, its highest level since May 21, on the same oil-driven inflation risk that lifted energy stocks. Shopify and Constellation Software both fell 4% as higher yields pressured richly valued growth names. One catalyst, two mechanisms: energy up on the direct commodity link, everything rate-sensitive down on the inflation and yield link.
The Cross-Border Comparison
U.S. indices split along a different line. The Dow fell 1.09% to 52,348.39 and the S&P 500 fell 0.28% to 7,482.71, both weighed down by the same oil and rate story, while the Nasdaq rose 0.20% to 25,870.65 on continued AI-related buying that outweighed the Middle East drag for large-cap technology names specifically. The TSX's 0.95% decline was steeper than the S&P 500's 0.28% decline despite Canada's energy sector capturing a direct benefit the S&P 500 does not have in the same weight. The drag from materials, financials and technology on the Canadian index was large enough to outweigh that advantage.
The Canadian dollar firmed slightly against the move, rising about a quarter of a U.S. cent to 70.59 cents US, supported by both the direct oil price benefit and the market's shifting expectations for Bank of Canada policy.
What Thursday's Open Inherits
Wednesday's chart shows a session that gave back seven weeks of gains in a single day, and the size of that reversal is the context Thursday's session opens against.
Six session closes are confirmed exchange data; intermediate daily levels are reconstructed directionally between those anchors. The index has given back its entire post-record-high gain since June 16.
U.S. Central Command confirmed a larger set of strikes overnight Wednesday into Thursday, roughly 90 targets against approximately 80 the night before, and Iran retaliated against three Gulf states simultaneously. Despite that, TSX futures edged only modestly lower Thursday morning per Investing.com, U.S. index futures actually rose, and WTI pulled back from an overnight high near $76 rather than extending Wednesday's advance. The premarket reaction was smaller than Wednesday's cash session move on a larger piece of news, a gap between headline severity and price action that the desk will be watching to see whether Thursday's actual trading session confirms, more detail on today's open at hdq.ca as it develops.