TORONTO – Canada’s main stock index fell nearly 450 points, while U.S. markets were also negative and oil prices rose amid more U.S. military strikes on Iran.
The U.S. military hit targets in Iran on Tuesday after it said Tehran tried to attack commercial ships and American forces in the Middle East, as hostilities flare once again in an intermittent war that has lasted more than six months. The U.S. strikes, and others on Sunday, abruptly ended a month without military action and threaten to fully reprise a conflict that has spiked global oil prices.
The October crude oil contract was up US$4.46 at US$90.22 per barrel.
The S&P/TSX composite index was down 444.75 points at 35,825.73. Basic materials and tech stocks weighed on the overall index while energy stocks were a positive force.
However, Ainsley Mackie, portfolio manager at Verecan Capital Management, said that despite ongoing geopolitical tensions, markets remain resilient. She said the TSX has posted five months of consecutive gains and is up around 14 per cent for 2026.
Mackie said that tech stocks have been influential for the direction of markets generally.
“We’re seeing on a day-to-day basis, flows are going between technology and other sectors, and today was one of those days when it was flowing out of technology, and it was flowing into energy,” she said.
Investors are also awaiting the Bank of Canada’s interest rate announcement on Wednesday as the escalating trade war with the United States casts an uncertain light.
“Tariffs do remain a risk and there is a real human and economic cost if factories were to close or jobs were to be lost, but from an investment perspective we stick to the view that these are more of a headline risk rather than a systematic risk for the Canadian economy or even the banking system here,” Mackie said.
The central bank has kept its benchmark rate on hold at 2.25 per cent for nearly a year now.
Financial market odds for a seventh straight hold in the policy rate stood at about 95 per cent as of Tuesday afternoon, according to LSEG Data & Analytics.
In New York, the Dow Jones industrial average was down 419.02 points at 52,766.88. The S&P 500 index was down 54.67 points at 7,631.47, while the Nasdaq composite was down 271.12 points at 26,099.77.
The weak start to September follows a shaky but mostly positive month for Wall Street. Every major index notched monthly gains in August. The same worries continue to hang over Wall Street, though, including anxiety over rising prices, U.S. government debt, and the impact of global conflicts on the global economy.
The Canadian dollar traded for 71.96 cents US compared with 72.12 cents US on Monday.
The December gold contract was down US$85.10 at US$4,396.40 an ounce.
This report by The Canadian Press was first published Sept. 1, 2026.
— With files from The Associated Press
Companies in this story: (TSX: GSPTSE, TSX: CADUSD)
