TSX Energy (red) surged immediately following the Hormuz closure and has remained elevated, while TSX Financials (green dashed) initially declined as rising bond yields pressured rate-sensitive banks before recovering as peace-talk optimism has grown. The convergence pattern in May is the market pricing resolution risk into both sectors simultaneously.

Energy's 35.5% YTD gain versus materials' 10% YTD loss defines the two-speed TSX of 2026; the GoC 10-year yield sub-panel shows how the post-Hormuz yield surge has accelerated the divergence, with materials entering negative YTD territory as the bond selloff intensified in May.

Since the war onset on February 28, the TSX energy sub-index has gained approximately 23.7% while the composite is down 4.5%. Gold miners, which rallied initially as a safe-haven bid, have given back nearly all those gains under pressure from rising bond yields. Canadian financials have underperformed the composite throughout. Friday's session compressed all three trends into a single trading day.

The May 15 session illustrated the TSX's fundamental tension in the current environment: energy benefits directly from elevated Brent crude, while the inflation expectations that keep oil elevated also raise bond yields that punish every other rate-sensitive sector. The composite's -1.27% close reflects the net of those opposing forces, with the heavier sector weights in financials and materials overwhelming the energy gain.

TSX sector YTD returns to May 14, 2026. The Iran War annotation marks the inflection point where energy and materials diverged sharply upward while rate-sensitive sectors including utilities (-5.4%) and real estate (-7.6%) moved in the opposite direction as bond yields repriced higher. The gold pill marks Energy as the leading sector at +24.1% YTD.

The TSX Energy sub-index has outperformed the composite by approximately 19 percentage points year-to-date. The gap opened almost entirely after the Hormuz closure on February 28. The energy sub-index peaked near 135 in early April before the ceasefire announcement and has consolidated in the 123-125 range since. Source: TMX Group.