Markets today: TSX drops 2.5% as Middle East conflict stokes inflation worries

North American markets fallAt 11:26 a.m. ET, the S&P/TSX composite index was down 913.93 points, or 2.65 per cent, at 33,626.35 after falling as low as 33,136.51.In New York, The S&P 500 dropped 2.4% in morning trading and was heading toward its worst day since October. The Dow Jones Industrial Average was down 1,232 points, or 2.5%, and the Nasdaq composite was 2.7% lower.Brent crude futures were up US$5.70, or 7 per cent, at US$83.44 a barrel after touching their highest since July 2024 at US$85.12.With the U.S. dollar holding strong, gold was down 2.7 per cent at US$5,185.80 an ounce. Bitcoin fell 2.2 per cent to US$67,871.41.03/03/26 10:52Oil shock finally hits global markets

– Tim Shufelt

If you, like me, were puzzled about Monday’s stock market action, today makes a lot more sense.

The rapidly expanding conflict in the world’s biggest oil-producing region has the potential to seriously disrupt global supply. Should the conflict last more than three weeks, which is how it’s shaping up, oil inventories in the Persian Gulf would be exhausted and producers would have no choice but to cease pumping oil, JPMorgan analysts said.

When oil shocks hit, stock markets crack

In that scenario, US$100-a-barrel oil would be likely to follow. That is tough to reconcile with the fact that North American stocks turned positive by the end of trading yesterday.

Oil shocks have a long history of dragging the economy and the stock market down with them. Investors seem to have awakened to that possibility today.

While the energy crisis of the 1970s seems like an eternity ago, the world is no less dependent on Middle East oil today than it was back then.

There’s an old rule of thumb that oil prices need to at least double over a one-year period to spark a recession. That’s still a very distant prospect, but now is the time to start contemplating worst-case scenarios.

03/03/26 10:43TSX joins global sell-off, falling 3.5%

Canada’s main stock index fell on Tuesday amid sector-wide losses, joining a global market slide driven by inflation fears ⁠as the Middle East conflict entered its fourth day.

The S&P/TSX composite index was down 1,221.72 points, or 3.54 per cent, at 33,319.55 as of 10:43 a.m. ET, and looked set for its steepest single-day drop since April 2025, when U.S. President Donald Trump announced ‌reciprocal tariffs.

Leading the sector-wide losses, the global gold index slumped 10.4 per cent and the materials sector, which includes metal miners, dropped 9.4 per cent.

Miners First Majestic and AYA Gold & Silver plunged more than 13 per cent each, while Capstone Copper slumped 13.3 per cent ‌after reporting quarterly profit below ‌estimates after the bell on Monday.

Spot gold fell more than 4 per cent, while silver dropped more than 9 per cent as the ⁠U.S. dollar strengthened amid escalations in the Middle East ⁠conflict.

– Reuters

03/03/26 10:13Wall Street falls 2 per cent as Middle East conflict stokes inflation worries

Wall Street’s main indexes fell more than 2 per cent on Tuesday, with the S&P 500 hitting its lowest in over two months, as investors ⁠braced for the impact of a widening Middle East conflict on oil prices, inflation and global trade.

Tehran’s threat to attack any vessel attempting to transit the Strait of Hormuz, combined with production halts by several Middle Eastern oil and gas producers, has driven up global shipping rates and prices of crude and natural gas.

The strait, a critical chokepoint, carries roughly one-fifth of the world’s ‌total oil consumption.

“Investors worry about additional inflation coming down the road. The main concern is that (oil prices) goes to over $100 a barrel and stays there,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.

“Hopefully this will be a quick and decisive war. But there are just a lot of questions, so I wouldn’t go out on a limb.”

Industries ‌such as airlines and travel that are exposed ‌to crude prices were knocked back for a second day. Delta and Royal Caribbean fell about 3 per cent and 4 per cent, respectively.

At 9:50 a.m. ET, the Dow Jones Industrial ⁠Average fell 1,083.69 points, or 2.22 per cent, to 47,821.09, the S&P 500 lost 141.91 points, or 2.06 per cent, ⁠to 6,739.71 and the Nasdaq Composite lost 483.41 points, or 2.12 per cent, to 22,265.45.

– Reuters

03/03/26 09:42Some ‘strategic’ investment ideas from David Rosenberg amid the market selloff

– Darcy Keith

While there’s certainly a sense of unease in markets this morning, investors aren’t fearfully dashing for the exit in droves – at least not yet. The CBOE Volatility Index (VIX) is sitting at about 26 as the trading day gets underway, up a couple points from yesterday – but no where close to levels above 50 seen during the Liberation Day presentation last year of Trump’s tariffs. Contrarians would suggest the VIX would need to get much higher before there’s true capitulation – the point at which we reach maximum pessimism and investors have historically been wise to put money back into the market.

Be that as it may, investors no doubt are looking for opportunities in this selloff. Economist David Rosenberg, in his morning newsletter, has some ideas on countries and sectors to ponder, stressing that this “is a time to be strategic, not to be a hero”:

“China (the Shanghai Composite at down 1.4 per cent, or less than half the carnage today across the continent) continues to outperform as its energy security is in far better shape after last year’s oil stockpiling move of cheap and sanctioned crude. The country can likely withstand four months of this global oil market constraint — not to mention the valve China enjoys from Russia and Kazakhstan… all of a sudden, Beijing’s push to renewable energy sources like solar is paying off. Remember, China also came out as a winner from the Supreme Court decision, with its tariff rate cut to 10 per cent under Section 122 from the average 20 per cent under IEEPA.”

“As for airline, travel and leisure stocks (the share of global flights heading to the Mideast has doubled in the past two decades to nearly 6 per cent) — they will undoubtedly remain in the penalty box until this war ends (though a pair-trade here may make sense in terms of going long the domestic regional carriers and short the internationally-exposed airlines), but at that point, a post-COVID type of buying opportunity is likely to present itself.”

“Until then, global investors should be focused on China as far as regions are concerned, and oil-producing countries (Mexico, Canada, Norway, Brazil) — though in a relative sense. Though being long the U.S. market relative to the rest of the world (in a reversal of what has happened these past fifteen months) makes sense too, because what makes America different is that it produces nearly all the natural gas it consumes.”

“As far as equity sectors are concerned, among the sectors that are not correlated with the oil price (or market interest rates for now), Health Care, Utilities, and Consumer Staples can be added to the exposures in Energy, Gold, Miners, and, of course, Defense companies. This is a time to be super-selective and focused on hedging risk and engaging in pair-trade relative strength strategies (as in, long Consumer Staples and shorting Discretionary). Even getting more granular, one can entertain the notion of shorting Germany against the European equity basket, seeing as the country is, by far, the largest gas consumer, and its storage levels are down to a razor-thin 21 per cent of its capacity.”

03/03/26 09:35North American stock markets drop on inflation, trade concerns

North America’s main ‌indexes opened sharply lower on Tuesday ⁠as investors braced for the impact of a widening ‌conflict in the Middle East on inflation ‌and global trade.

At 9:32 a.m. ET, ⁠the S&P/TSX composite index ⁠was down 2.26 per cent at ⁠33,682.61 points.

The Dow ‌Jones Industrial Average fell ⁠411.7 points, or ⁠0.84 per cent, at the open to 48,493.11. The S&P 500 fell 81.4 points, or ⁠1.18 per cent, at the open to 6,800.26, while ⁠the Nasdaq Composite dropped 456.5 ⁠points, or 2.01 per cent, to ‌22,292.37 at the opening bell.

– Reuters

03/03/26 09:26Canadian dollar weakens, benchmark yield climbs

The Canadian dollar weakened ‌against the greenback on Tuesday, and ⁠the yield on benchmark government debt climbed.

The ‌loonie was trading 0.2 per cent lower at ‌$1.3707 to ‌the greenback, or 72.96 U.S. ⁠cents, after ⁠trading in a range of $1.3661 to 1.3722.

Canadian government 10-year bond ⁠yields rose 7.5 basis points to 3.296 per cent. ⁠The yield on similar ⁠U.S. government benchmark ‌debt rose to 4.1036 per cent.

– Reuters

03/03/26 08:59Oil shock could strain emerging markets beyond inflation, analysts say

The war in Iran and the resulting surge in energy prices will ‌impact emerging markets well beyond inflation to broader pressures on external balances, currencies and capital flows, analysts warn.

Brokerages, including J.P.Morgan and Bernstein, expect Brent prices to ⁠rise above the US$100 mark if the conflict continues as Tehran has vowed to close the Strait of Hormuz and said it would fire on any ship trying to pass the crucial shipping route for oil and gas.

Brent crude futures were up US$5.63, or ‌7.2 per cent, at US$83.36 a barrel after touching their highest since July 2024 at US$85.12.

“A mere 10-per-cent rise in oil prices can deteriorate current account balances (for emerging markets) by 40-60 basis points. Prolonged increases would only deepen these deficits,” ‌analysts at ING said in a ‌note, adding that Thailand, South Korea, Vietnam, Taiwan and Philippines are the most exposed.

Goldman Sachs estimates that a supply driven jump in Brent crude from US$70 to US$85 would add roughly 0.7 percentage points ⁠to inflation across emerging Asia and knock about 0.5 points off economic growth, while widening current account deficits across almost every ⁠economy in the region, particularly Thailand, Singapore and South Korea.

Citigroup warned that a prolonged oil ‌shock could “aggressively de-anchor” inflation expectations across emerging markets, with low-reserve countries such as Argentina, Sri Lanka, Pakistan and Turkey facing heightened risks of capital outflows and currency slides.

Separately, J.P. Morgan’s analysts moved EMEA emerging market foreign exchange to “marketweight” on Tuesday and added Poland’s zloty to their list of “underweight” currencies.

– Reuters

03/03/26 08:05Scotia analyst: These companies set to benefit from feds’ high speed rail plans

– Scott Barlow

Scotiabank analyst Patrick Bryden attempted to uncover the winners from the federal government’s high speed rail project,

“In September 2025, the Alto high-speed rail project was identified by the Government of Canada as a transformative strategy to be part of its Building Canada initiatives. The $60 billion-$90 billion project is the largest (nominal and inflation adjusted) ever undertaken in Canada’s history. Alto will create a modern 1,000 km transportation system in the country’s most populous economic corridor, from Toronto to Quebec City, and was confirmed in late 2025 with the support of the Major Projects Office (MPO) … Shovels in the ground expected by 2029-2030; the project is also expected to generate 50,000 jobs to construct the various segments of the route over a decade or more … the six-member Cadence Consortium has been selected by the Government of Canada as the developer partner for the project … AtkinsRealis Group Inc. (ATRL-T) is part of Cadence. Design and engineering comprise 13 per cent of precedent capital budgets, which, in theory, equate to annual net revenue over the next decade of 3.4-5.2 per cent of ATRL’s current annual revenue.

“We have estimated the amount of iron ore and steel required to complete the project and calculated how much of both commodities are likely required for all the major projects and transformative strategies confirmed by the Government of Canada to date. We expect such demand to be 6 per cent higher on an annual basis over the next decade. Sourcing domestically could be an emergent tailwind for iron ore producers Labrador Iron Ore Royalty Corp. (LIF-T) and Champion Iron Ltd. (CIA-T), steel players Algoma Steel Group Inc. (ASTL-T; not covered), Russel Metals Inc. (RUS-T), and Stella-Jones Inc. (SJ-T) for steel structures and pressure-treated wood materials … e believe Alto may potentially raise demand for equipment and service providers such as Toromont Industries Ltd. (TIH-T), Wajax Corporation (WJX-T), and RB Global, Inc. (RBA-T; coverage suspended), and for construction-related interests such as Aecon Group Inc. (ARE-T; not covered), Badger Infrastructure Solutions Ltd. (BDGI-T; not covered), and Bird Construction Inc. (BDT-T; not covered).”

03/03/26 08:02Retailer Pet Valu reports fourth-quarter profit up from year earlier, raises dividend

Markham, Ont.-based Pet Valu Holdings Ltd. (PET-T) raised its dividend as it reported a fourth-quarter profit of $29.4-million and a more than 10-per-cent increase in revenue compared with a year earlier.

The pet food and pet supply retailer says it will now pay a quarterly dividend of 13 cents per share, up from 12 cents per share.

The increased payment to shareholders came as the company said it earned 42 cents per diluted share for the 14-week period ended Jan. 3. The result compared with a profit of $28.9-million or 40 cents per diluted share for the 13-week period ended Dec. 28, 2024.

Revenue for the quarter totalled $326.4-million, up from $295.1-million, helped in part by the extra week. Excluding the extra week, Pet Valu says revenue totalled $305.5-million in its fourth quarter of 2025.

– The Canadian Press

03/03/26 07:50Stocks selloff worsens as energy price jump revives inflation fears Open this photo in gallery:

A person stands in front of an electronic stock board with Japan’s stock prices in Tokyo Tuesday, March 3.Shingo Fukuma/The Associated Press

A selloff in stocks and ‌government bonds deepened while the dollar strengthened on Tuesday, as widening conflict in the Middle East fuelled a spike in energy prices and raised investor concern about inflation.

U.S. S&P 500 e-mini futures were down 1.4 per cent while Nasdaq e-mini futures fell 1.8 per cent, suggesting the selloff may engulf Wall Street later following a volatile session on Monday ⁠that saw the S&P 500 rally from an early slide to close flat and the Nasdaq Composite climb 0.4 per cent.

In Europe the STOXX 600 fell as much as 3.6 per cent in morning trading and was last down 2.8 per cent – on track for its biggest daily decline since April – following a 1.7 per cent drop on Monday.

Meanwhile, government bond markets from the euro zone to the United States and Britain sold off sharply on concerns that sustained higher inflation would likely force central banks to turn more hawkish.

On Monday, U.S. President Donald Trump sought to ‌justify a broad, open-ended war on Iran, saying the campaign was ahead of expectations.

In natural gas markets, benchmark European LNG prices leapt by 34 per cent, having jumped 39 per cent on Monday, while U.S. natural gas futures were up nearly 6 per cent.

Qatar halted its production of liquefied ⁠natural gas (LNG) on Monday, prompting precautionary shutdowns of oil and gas facilities across the Middle East. Qatari LNG production makes up about ⁠20 per cent of global supply. An official from Iran’s Revolutionary Guards said on Monday that the Strait of Hormuz was closed to marine traffic and the country would fire on any ship trying to pass.

Brent crude futures tacked on another 8.9 per cent to $84.64 on Tuesday, up more than 16 per cent on the week.

– Reuters

03/03/26 07:35RBC commodity strategist expects $100 crude if conflict continues

– Scott Barlow

RBC Capital Markets head of global commodity strategy Helima Croft sees oil reaching US$100 per barrel if the Iran conflict continues,

“Energy is now clearly in the crosshairs of the Iran war, with the Strait of Hormuz effectively closed and key facilities directly targeted including Qatar’s LNG operations. The ultimate price trajectory will hinge on the duration and degree of disruption posed by the conflict, but Iran’s drone capabilities and missile stockpiles suggest that market participants should potentially prepare for cascading outages. In a prolonged conflict scenario, we see oil prices reaching into the $100s per barrel, as we and regional exports warned, and global gas prices could at least hit their highest since Q1 2023 (post the 2022 highs after Russia’s invasion of Ukraine). The lack of secure alternative export routes could render the majority of the Middle East’s energy exports stranded assets if there is no viable plan to incentivize shipping companies and insurers to move tankers through the Strait. We see the rise in European gas prices, i.e., TTF, as a more accurate reflection of the true risk profile from this conflict than the more

modest run-up in oil prices currently. At this stage, we view oil prices as a lagging rather than a leading indicator of the potential supply shock risk posed by an extended conflict”

03/03/26 07:32Scotiabank strategist recommends these Quality-at-a-Reasonable-Price stocks

– Scott Barlow

Scotiabank strategist Hugo Ste-Marie is recommending quality at a reasonable price stocks,

“A less risk-on market environment should favor Quality, especially given the length and scale of its recent underperformance. We would note two caveats though. First, if the start of a new Quality cycle typically sees strong performance from Top Quality names, it does not necessarily translate to top over bottom Quality outperformance (see exhibit 9), especially in the US. Moreover, while top Quality prevails more visibly vs. bottom Quality in Canada, a sustained commodity trade might keep investors interested in resource “quant junk” and make the average lie. Second, adding a Value twist to our Quality recommendation should help improve performance given this remains a risk-on market”

The stocks are Metro, Atco, Wesdome Gold Mines, Altagas, IGM Financial, CIBC, TD Bank, CCL Industries, Saputo, Centerra Gold, OceanaGold, Royal Bank, Peyto Exploration and Development, Headwater Exploration, Quebecor, Gibson Energy, Canadian Tire, Stella-Jones, Imperial Oil, Fairfax Financial Holdings, Suncor Energy, Keyera, Bank of Nova Scotia, Primaris REIT, Finning, Bank of Montreal, Russel Metals, Endeavour Mining PLC, Parex Resources and CES Energy Solutions .

03/03/26 06:32Tuesday’s analyst upgrades and downgrades

– David Leeder

Open this photo in gallery:

The Bank of Nova Scotia is pictured in the financial district in Toronto, Friday, Sept. 8, 2023.Andrew Lahodynskyj/The Canadian Press

TD Cowen analyst Mario Mendonca thinks Bank of Nova Scotia (BNS-T) has made “significant strides” in improving its return on equity, however he’s “increasingly concerned” it will “lag its peers as investor focus shifts toward balance sheet growth.”

That prompted him to downgrade his rating to “hold” from “buy” previously, believing its current valuation “adequately reflects the bank’s improving ROE profile after recent re-rating.”

Markets today: TSX drops 2.5% as Middle East conflict stokes inflation worries

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