Market-implied odds of a July 29 Fed hike spiked past 46% and have since fallen under 17%, but oil is still climbing, and that leaves Governor Macklem facing the same inflation calculus with less certainty about what Washington does first.

The index added 408.76 points to close at 35,369.08 Tuesday, its strongest session in weeks, as gold-linked miners outran even the energy names benefiting from still-elevated oil prices.

Energy led Monday's TSX sector split as crude touched a five week high, but Tuesday's mediation driven pullback in oil is the first real test of whether that leadership holds.

Brent touched $90 and WTI hit $84.59 Monday on the same headlines, but Toronto and New York read them in opposite directions: U.S. indices rallied on a semiconductor rebound ahead of this week's earnings while the TSX's precious metals weighting dragged it lower.

The alleged U.S. strike on Iran's under-construction Darkhovin nuclear facility is a different category of target than anything hit in the previous five months of this conflict, and the IAEA's finding, not Monday's oil price, is the variable that tells Canadian portfolios which of two paths this war takes next.

Gold's failure to rally on the biggest escalation of the US-Iran war in weeks is not a fluke. It is the clearest sign yet that oil-driven inflation fear, not geopolitical fear, is now setting the price of the safe-haven trade, and Canadian portfolios showed the same pattern in miniature on Friday.

The S&P/TSX Composite closed Thursday at 35,340.15, down 0.21 per cent and essentially unchanged from Friday's close five sessions earlier. In between, the index touched a record high, then gave nearly all of it back in a single session, as elevated oil prices and falling gold prices pulled the benchmark in opposite directions all week.

Wednesday's hold at 2.25 per cent came with a higher 2026 inflation forecast, a lower 2026 growth forecast, and the Governor's most upbeat tone since January. The mechanism connecting all three: a temporary, war-driven energy shock layered on top of a domestic recovery the Bank believes is only now broadening.

The Bank of Canada announces at 9:45 a.m. Eastern with markets pricing a near-certain hold. Fifteen minutes later, Fed Chair Kevin Warsh faces the Senate to explain a committee that grew more hawkish in June even as US inflation cooled. Both are being asked to price the same barrel of oil.

Energy strength was not enough to offset financials and materials on Bay Street, and Tuesday's steeper losses are landing in Asia, where Kospi is down 3.2% while North American futures sit close to flat.

A reinstated Hormuz blockade sent Brent crude sharply higher, but equities, bonds and the loonie priced in almost none of it, a pattern behavioural finance recognises as habituation rather than calm.

Friday's close left the index within 0.9% of its June 17 high. Tuesday's US inflation data, Wednesday's Bank of Canada decision, and Warsh's first Congressional testimony now land inside a single 48 hour window, against a backdrop of oil already up more than 4% Monday.

The TSX gained 0.76% Thursday to 35,200, led by gold miners and the banks, even as the Iran conflict widened to two new countries. Why a U.S. chip rally and easing bond yields did the real work, and what a five-week, 613-point trading range says about Canadian equity exposure.

A single Iran headline pushed oil up and bond yields up at the same time, splitting the index into a clear winner and a clear group of losers underneath a headline decline of just under one percent.

WTI's jump to $74.35 lifted Methanex, South Bow, and ARC Resources more than 4% while HudBay Minerals and Energy Fuels fell over 6%, a split that says more about currency and sub-sector mechanics than about the price of oil itself.

WTI is up about a percent from Monday's four week low after Iran's Revolutionary Guard fired on two vessels in the Strait of Hormuz, the first breach of the June 17 memorandum of understanding. The Bank of Canada's blackout for the July 15 decision started this morning, before either the attack or the market's tepid reaction to it could enter the public record.