TSX Rallies as Iran Reopens Strait of Hormuz, Sending Oil Prices Tumbling

The S&P/TSX Composite Index surged on Friday, closing at 34,346.29, an increase of 294.06 points or 0.86%. The rally was driven by the announcement from Iranian Foreign Minister Abbas Araghchi that the Strait of Hormuz would be reopened to all shipping for the duration of the current two-week ceasefire. The strait had been closed since the outbreak of the U.S.-Iran conflict on February 28, severely restricting energy exports from Arab nations and driving oil prices higher. While U.S. President Donald Trump confirmed the reopening, he noted that the U.S. Navy will maintain its blockade of Iranian ports until specific transactions are finalized. The geopolitical thaw caused a sharp correction in energy markets. WTI crude oil for May delivery plummeted by $10.24, or 10.81%, to settle at $84.45 per barrel. This price collapse weighed heavily on the energy sector, which fell 4.79%, though gains in gold-linked shares helped the materials sector rise 2.15%. Beyond energy, the TSX saw broad gains, led by the consumer discretionary sector (+2.78%), IT (+1.85%), and financials (+1.49%). Market optimism is further bolstered by reports of a proposed peace plan involving the release of $20 billion in frozen Iranian funds in exchange for the relinquishment of enriched uranium. In domestic economic data, the Canadian Federation of Independent Business reported its long-term barometer index rose to 58.5 in April. Conversely, housing starts fell 6% to 235,900 in March. Trade officials also expressed optimism regarding the ongoing CUSMA renewal negotiations despite previous concerns over a July 1 deadline.