TSX Today Rises for a Fourth Straight Session — But the Strategists Are Still Cautious

The S&P/TSX Composite Index closed Monday at 33,181.97, up 73 points and closing higher for the fourth straight session on Bay Street in downtown Toronto, where the old Exchange Tower stands at the intersection of King and York and the financial district hums with the unique midday energy of a city whose economy is deeply tied to what happens in oil sands and bank boardrooms. If everyone involved weren’t simultaneously keeping an eye on oil prices, Iran diplomacy, and the Bank of Canada and hoping that none of them sent contradicting signals in the next 48 hours, this streak would feel more comforting.

When compared to its starting point, the TSX has had a truly noteworthy year. When compared to the current level of 33,181, the 52-week low of 22,227 is a startling figure. Energy prices, the strength of the financial sector, and a wider recovery in commodity-linked stocks have all contributed to the index’s remarkable rise of more than 43% in price return terms over the past year. As a result, Canada’s market composition differs significantly from that of its American counterparts. The TSX has been driven by banks and oil, while the S&P 500 is heavily weighted toward technology. This distinction is important, and in 2026, it has primarily been a feature rather than a bug.

For the majority of this year, the energy sector has dominated the TSX, and Monday’s session served to confirm that. With a volume of more than 23 million shares, Canadian Natural Resources saw a 1.63% increase. Cenovus Energy saw a 1.19% increase. TC Energy increased by 1.12%. The Iranian conflict and the ongoing closure of the Strait of Hormuz have driven up the price of WTI crude, which is currently hovering around $112.75 per barrel, and Brent, which has settled above $109. Increased oil prices directly benefit Canadian energy producers. Because the same oil prices that boost the TSX also fuel inflation and complicate the Bank of Canada’s rate decisions, the calculation is more difficult for the larger Canadian economy, which depends on energy exports in ways that few developed countries do.

In the same way that no single sector anchors the S&P 500, the financial sector, which anchors the TSX, remained stable on Monday. Canadian Imperial Bank of Commerce increased by 0.87%, Toronto-Dominion Bank increased by 0.70%, and Royal Bank of Canada increased by 0.66%. The big six Canadian banks are getting ready for a busy season of earnings and shareholder meetings. BNS and BMO will release their Q2 results in late May, followed closely by RY, CM, and TD. In April and May, there is a backlog of dividend announcements under various names. Even when geopolitical headlines are causing volatility in other parts of the index, this type of institutional calendar activity tends to stabilize the financial sector.

The ongoing Iran ceasefire talks, especially the reports that a framework mediated by Pakistan might establish a 45-day pause in hostilities that could result in the reopening of the Strait of Hormuz, were the headline that affected Monday’s market more than any particular Canadian data point. Earlier last week, the TSX gained about 1,000 points over the course of two sessions due to “cautious optimism” surrounding those reports; this phrase, which appears in several analyst notes, accurately sums up the sentiment.

Be careful. Not persuaded. but reacting to the potential. Any solution might actually harm the energy industry by lowering oil prices, which would be a paradox for a market that has benefited from those same prices. Investors in TSX-heavy Canadian portfolios will need to consider the genuine complexity of the energy-peace tension.

Doug Porter of BMO noted an important point: “We are all bracing for impact on inflation readings.” The background is that if high oil prices continue, they will appear in CPI data in the upcoming months. If inflation returns, the Bank of Canada, which is currently thought to be on hold for the rest of 2026, may find itself in a more difficult situation. Canadian net trade is expected to contribute negatively to Q1 GDP, according to TD and CIBC, adding another factor to the domestic economic picture that has no clear short-term solution.

Observing the TSX today gives the impression that the index is simultaneously navigating two distinct stories: the external one, which involves oil prices, geopolitics, and the erratic rhythms of Middle East diplomacy, and the domestic one, which involves interest rates, GDP data, trade flows, and bank earnings. For the past few weeks, the two stories have been moving in essentially the same direction, generating gains in four straight sessions. They won’t always work together in that manner. Reaching the 52-week high of 34,544, which is about 4% above current levels, will likely require either domestic economic data that gives the Bank of Canada something to say or peace news that lowers oil prices gradually rather than sharply. Both are still feasible, but neither is assured.