TORONTO – Canadian and U.S. stock markets dropped Thursday, after seeing some relief a day earlier, as the price of oil rose above US$80 per barrel.
The S&P/TSX composite index was down 332.89 points at 33,609.97.
In New York, the Dow Jones industrial average was down 784.67 points at 47,954.74. The S&P 500 index was down 38.79 points at 6,830.71, while the Nasdaq composite was down 58.50 points at 22,748.99.
The losses came as financial markets around the world kept following the cue of oil prices. Sharp increases there are raising worries that a long-term surge could grind down the global economy, exhaust households’ ability to spend and push interest rates higher.
“The fear is that the market can absorb a bit of an oil price increase, but if oil prices were to double, from US$60 a barrel to US$120 a barrel, that creates significant drag on the consumer,” said Ashish Utarid, assistant vice-president of investment strategy with IG Wealth Management.
If higher oil prices are sustained for months on end, he said, it would have a significant economic impact.
“What we want to do as investors is just understand that yes, this is a short-term hit to consumption cost inflation. But it’s not necessarily going to be a destructive market event unless things start to really continue,” Utarid said.
Oil prices rose after Iran launched a new wave of attacks against Israel, American bases and countries around the region. The war’s escalations are raising worries about how long disruptions will last for the production and transport of oil and natural gas in the region.
The U.S. stock market has a history of bouncing back relatively quickly following conflicts in the Middle East and elsewhere. That has many professional investors suggesting patience and riding through the market’s swings.
If oil prices spike further and stay there, some analysts and investors say it could be too much for the global economy to withstand. Uncertainty about what will happen has caused frenetic swings across financial markets this week, sometimes hour by hour.
Much will depend on what happens with the Strait of Hormuz. Roughly a fifth of the world’s oil typically sails through the narrow waterway off Iran’s coast.
Wall Street’s drop would have been worse if not for Broadcom. The chip company’s stock rose 4.8 per cent after it reported stronger profit and revenue for the latest quarter than analysts expected. It’s one of Wall Street’s most influential stocks because it’s one of the biggest by total value, and CEO Hock Tan said it benefited from a 74 per cent jump in revenue for AI chips.
In the Canadian stock market, all sectors were in negative territory, except for technology, with basic materials being the biggest weight.
The April gold contract was down US$56.00 at US$5,078.70 an ounce.
Steve Kulchyk, vice president of options dealing and structured products at Monex Canada, said in a statement that geopolitical escalations pushed investors to safe-haven assets, which helped precious metal prices earlier in the week.
“That being said, price action in the subsequent days has not been linear as markets assess whether the conflict broadens,” he said.
The Canadian dollar traded for 73.12 cents US compared with 73.19 cents US on Wednesday.
The April crude oil contract was up US$6.35 at US$81.01 per barrel.
This report by The Canadian Press was first published March 5, 2026.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
— With files from The Associated Press.
