North American financial markets delivered a solid recovery Monday as investors shook off the jitters from weekend ceasefire negotiations that fell apart, with both U.S. and Canadian indices closing firmly in positive territory.
The S&P 500 climbed 1 per cent, pulling within striking distance of its early-year record high, while the Dow Jones Industrial Average added 301 points (0.6 per cent). The tech-heavy Nasdaq composite surged 1.2 per cent, signalling renewed appetite for growth stocks. North of the border, Canada's S&P/TSX composite index gained 183.48 points to settle at 33,879.24.
The turnaround came despite heightened rhetoric over the Strait of Hormuz, the critical chokepoint through which a significant portion of global oil supplies flow. After talks stalled over the weekend, U.S. President Donald Trump threatened a blockade of the strategic waterway, while Iran responded by threatening Persian Gulf and Gulf of Oman ports.
Oil Markets Show Signs of Stabilization
Brent crude oil, the international pricing benchmark, settled at $99.36 US per barrel—still elevated but down from its morning peak near $104 US. The commodity remains well above the roughly $70 US per barrel level seen before the conflict erupted in late February, but below the $119 US ceiling reached during peak geopolitical anxiety.
"Markets are taking some encouragement from the fact that the two sides are talking and that the broader ceasefire seems to be holding, for now," said Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute.
The moderation in oil volatility provided breathing room for equities, though concerns about energy supply disruptions continue to weigh on investor sentiment across multiple asset classes.
Earnings Season Could Provide Support
Wall Street is banking on strong corporate earnings reports to offset lingering geopolitical risks. As major U.S. companies begin reporting first-quarter financial results, strong profitability could reinforce the market's recovery and help sustain the upward momentum.
In the bond market, Treasury yields ticked lower as energy prices retreated from morning highs. The 10-year U.S. Treasury yield fell to 4.29 per cent from 4.31 per cent Friday.
Global Markets Mixed on Regional Concerns
International equity markets painted a mixed picture Monday. Hong Kong's Hang Seng fell 0.9 per cent and South Korea's Kospi dropped 0.9 per cent, reflecting broader Asia-Pacific caution. European indices also retreated as investors weighed geopolitical risks against economic fundamentals.
For Canadian investors and businesses, the combination of a recovering North American market and volatile commodity prices presents both opportunity and uncertainty. Energy-dependent sectors and import-reliant industries face ongoing pressure from elevated fuel costs, while defensive stocks and defensive sectors benefit from the flight-to-safety mentality still gripping some corners of the market.
This article is based on reporting from CBC Business. For the original story, visit CBC News Business.