Financials have gained 22% since the war began in February while materials fell 25%. The rotation behind that split, not Wednesday's single session, is what built the TSX's record, and Thursday's oil whipsaw shows the war that caused it hasn't actually ended.

On July 8, twenty-one days after the memorandum that defined June, the United States and Iran resumed open conflict. WTI round-tripped from a five-month low back above eighty-five dollars, Warsh's Fed sent long yields to a nineteen-year high, and the Strait of Hormuz closed the month at its worst traffic reading of the war.

The S&P/TSX Composite closed at 35,333.78, down 415.92 points a day after its record high. Canadian Natural and Cenovus both rose more than 4.5 percent on the same session TD and RBC fell more than 3, and that split is the story going into Thursday.

Houthi forces claimed a strike on Saudi Arabia's East-West Pipeline, the route built to move crude around the Strait of Hormuz entirely, the same day Oman proposed a formal Hormuz shipping mechanism. The base case still points to de-escalation, but the tail risk just moved to different infrastructure.

Oil's sharpest single session drop in weeks is pulling gold, bonds, and equity futures in the same bullish direction for a different reason. The TSX Composite, which closed Friday at 35,369.10, faces its steepest test of the sector rotation this month when energy names open.

WTI's slide past seven per cent puts a specific number on five months of energy sector paper gains. Unlike 2024, the decision this time is not racing a rate change. It is racing the calendar, with Wednesday's Federal Reserve decision and Cenovus's earnings landing the same day.

The TSX fell 0.82% a day after a record close, as oil past $100 lifted energy but hit yield-sensitive banks. Energy and utilities were the only sectors to gain.

Two Saudi tankers struck in the Red Sea push Brent past $100 for the first time since May. The muted reaction across the TSX and gold suggests markets still treat this as tail risk, not the base case.

Bab el-Mandeb traffic carrying Saudi crude surged more than tenfold this year as producers routed around Strait of Hormuz risk. A new Houthi blockade threat is closing that alternative just as Iran escalates attacks on the original chokepoint.

Yemen's Houthis have declared a maritime embargo against Saudi Arabia, threatening the Red Sea export route Riyadh has used to offset the Strait of Hormuz disruption, even as markets show their first real mediation signal in over a week.

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 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.

The S&P/TSX Composite closed at 35,416.20 Wednesday, its third straight gain, as Canadian energy producers rallied on the Hormuz-driven oil surge while the index's gold miners, led by an 8.4 per cent drop in Franco-Nevada, absorbed the other side of the same trade.

For four months, Iran's leverage was a shipping lane. Wednesday's threat to halt energy exports from the entire region, paired with a strike that hit actual production infrastructure, changes the mechanism connecting this war to Canadian portfolios, even though the base case has not changed yet.

Energy gains booked inside a corporate portfolio this year do not touch this year's tax bill. They determine how much of next year's small business deduction survives, and the window to manage that number closes December 31.

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.