TORONTO – Canada’s main stock index moved lower in trading on Tuesday, weighed down by losses in the battery and base metals sectors, while U.S. markets also fell.
The S&P/TSX composite index was down 92.11 points at 33,741.24.
In New York, the Dow Jones industrial average was down 322.24 points at 49,363.88. The S&P 500 index was down 49.44 points at 7,353.61, while the Nasdaq composite was down 220.03 points at 25,870.71.
The market’s performance remains tied to the closure of the Strait of Hormuz, said Sadiq Adatia, chief investment officer at BMO Global Asset Management.
The strait was shuttered by Iran in response to U.S. and Israeli attacks, prompting global oil prices to spike since late February.
Adatia said oil prices are still elevated amid continued uncertainty, and the market is seeing a “breather” after a recent run.
“We haven’t got to a faster resolution and the market’s getting a little bit more nervous about that,” Adatia said.
“The market keeps looking for some sort of answer or … guidance as to when this thing closes.”
Last week, U.S. President Donald Trump paid a visit to Beijing for a series of meetings with Chinese leader Xi Jinping, which included discussions between the pair about the Iran war.
Trump said Xi told him that China wants to help negotiate an end to the war and a reopening of the Strait of Hormuz. Trump has previously expressed hope that China would use its leverage as Iran’s biggest trading partner to prod Tehran into a deal on U.S. terms.
Trump also said Xi assured him that China wouldn’t provide Iran with military equipment.
While the market is searching for any “tidbits of information” on the war and potential progress toward a resolution, there hasn’t been enough movement in recent days, said Adatia.
“With Trump, obviously you take everything with a grain of salt, but if it came from the other two sides, I think it would hold a lot more credibility and the markets would probably react very positively to it,” he said.
“For now, you’re seeing the markets kind of give back a little bit of what it’s done in the last few weeks because there’s nothing new coming up and nothing new means we’re still in the same bad position.”
Higher gas prices driven mainly by the war in Iran pushed Canada’s inflation rate higher in April, Statistics Canada said Tuesday.
StatCan said the cost of gasoline was 28.6 per cent higher year-over-year last month as conflict in the Middle East disrupted global oil shipments, sending prices soaring at the gas pumps. April also marked the switch to more expensive summer gasoline blends at gas stations in Canada.
Overall, inflation rose to 2.8 per cent last month — the highest annual inflation rate since May 2024. The new report marks a jump from March’s inflation rate of 2.4 per cent, though economists had expected inflation would accelerate even more to top three per cent.
Adatia said that weighed on the TSX on Tuesday, especially given the Bank of Canada’s previous discussion surrounding the possibility of hiking its key policy rate.
“This also potentially causes them to stay on that path, but at the same time you’ve got a weaker Canadian economy and obviously (renegotiation of the Canada-United States-Mexico) deal is around the corner,” he said.
“So it puts, obviously, the Bank of Canada in a very difficult position where we want to talk about inflation. But at the same time the risks are ahead and current risks already in the economy. So I think that’s also causing a little bit of the negativity on Canada’s stock market.”
The Canadian dollar traded for 72.69 cents US compared with 72.72 cents US on Friday.
The July crude oil contract was down 23 cents US at US$104.15 per barrel.
The June gold contract was down US$46.80 at US$4,511.20 an ounce.
—With files from Craig Lord in Ottawa and The Associated Press.
This report by The Canadian Press was first published May 19, 2026.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
