TORONTO – Canadian and U.S. markets moved in opposite directions on Tuesday as oil prices rose.
“What we’re seeing right now is a bit of a rotation in the marketplace … in general, if you look at the North American equity market, we’ve got a shift away from technology stocks,” said Philip Petursson, chief investment strategist at IG Wealth Management.
In Canada, he said the rotation is moving into “older economy stocks,” including energy and financials.
The S&P/TSX composite index was up 60.27 points at 35,272.59.
In New York, the Dow Jones industrial average was down 130.76 points at 52,925.15. The S&P 500 index was down 33.58 points at 7,503.85, while the Nasdaq composite was down 302.47 points at 25,818.69.
The British military said three tankers were struck by projectiles in the Strait of Hormuz. The United States later revoked a licence that had authorized the sale of Iranian oil as part of an interim deal to end the fighting between the U.S. and Iran.
That hurt hopes that the strait may fully reopen to oil tankers carrying crude to customers worldwide from the Persian Gulf.
Brent crude, the international standard, rose three per cent to settle at US$74.16 per barrel. The August crude oil contract was up US$1.89 at US$70.44 per barrel.
Over the past few weeks, Petursson said there has been “relative calm” in the market.
“That, in my mind perhaps reflected a little bit more confidence than was warranted that the Middle East conflict is completely behind us and I think we will continue to see these flare-ups,” he said.
Petursson said he thinks the uncertainty will persist and could result in a US$5 to US$10 risk premium in the price of oil that would benefit energy stocks.
Higher oil prices put upward pressure on inflation, and U.S. Treasury yields climbed in the bond market. The yield on the 10-year Treasury rose to 4.54 per cent from 4.48 per cent late Monday and from just 3.97 per cent before the war with Iran began.
“When you start seeing the 10-year yield break above 4.5 per cent, that means inflation expectations are becoming more entrenched,” Petursson said.
He said the 10-year Treasury will be a key metric to watch going forward.
“It has the greatest impact on U.S. equity valuations and could be the trigger for increased volatility as we head into the fall,” Petursson said.
On Wall Street, AI stocks have been under similar pressure in recent weeks on worries that their prices shot too high and that AI may not produce enough productivity and profits to make all the investments in chips and data centers worth it.
Drops of 6.5 per cent for Advanced Micro Devices, 9.7 per cent for Intel and 4.7 per cent for Micron Technology were the heaviest weights on the market.
SpaceX, which owns the xAI business, fell 6.8 per cent in its first trading after getting included in the Nasdaq 100 index.
The Canadian dollar traded for 70.43 cents US compared with 70.33 cents US on Monday.
The August gold contract was down US$10.10 at US$4,157.40 an ounce.
This report by The Canadian Press was first published July 7, 2026.
— With files from The Associated Press
Companies in this story: (TSX: GSPTSE, TSX: CADUSD)
