TSX gains amid Iran’s ’weak’ counter

Investing.com -- Canada’s main stock exchange bounded higher til close on Monday, as investors kept tabs on a possible Iranian reaction to U.S. strikes over the weekend.

By the 4:00 ET close, the S&P/TSX 60 index had gained 7.1 points, or 0.45%.

The Toronto Stock Exchange’s S&P/TSX composite index rose 111.8 points or 0.4%, following Friday’s 8.4 point or 0.03% dip. The average inched down 0.03% for the week.

Prime Minister Mark Carney and several key EU officials agreed on a new bilateral relationship centered on defense and security, pointing to a shift away from reliance on the U.S. This comes amid talks between the U.S. and Canada on a new economic-and-security deal, with Carney looking to U.S. President Donald Trump to lift current tariffs, as well as raised steel and aluminum duties set to go into effect next month.

U.S. stocks tick higher

Elsewhere, U.S. stock indexes gained on Monday.

In the early afternoon, Iran launched missile attacks at the U.S. airbase in Qatar. Iran reportedly gave advanced notice, resulting in no casualties and pointing to a de-escalating olive branch of sorts. 

U.S. President Donald Trump called the attacks "very weak" but thanked Iran for giving warning, saying, "Perhaps Iran can now proceed to Peace and Harmony (JO:HARJ) in the Region, and I will enthusiastically encourage Israel to do the same."

The Islamic republic has also warned of "everlasting consequences" and stepped up its aerial bombardments of Israel, which kicked off the violence 11 days ago with its own surprise strikes on Iranian nuclear infrastructure.

Iran has called Trump a "gambler" and seemed to hint that the weekend strikes expanded the range of legitimate targets for its military. Trump, meanwhile, raised the question of regime change in Iran in a social media post on Sunday.

Media reports in Iran have suggested that the country is mulling blocking the Strait of Hormuz, a key artery for oil and gas supplies being sent around the world from the Middle East. Other reports have said that Iran may target one of several U.S. military bases located throughout the region.

Some analysts have argued that although tensions in the Middle East have now intensified, the strikes have removed at least one shroud of uncertainty around whether Trump would move to strike Iran.

By the 4:00 ET close, the Dow Jones Industrial Average rose higher by 375 points or 0.9, the S&P 500 increased by 57.4 points, or 1%, and the NASDAQ Composite added 183.6 points, or 0.9%.

Tesla Inc (NASDAQ:TSLA) shares soared over 8% in Monday trading, as the company officially launched its Robotaxi service in Austin, Texas. Wedbush analyst Dan Ives rated his experience in the robotaxis a "10/10."

Hims Hers Health Inc (NYSE:HIMS) stock plummeted over 30% on Monday, after Novo Nordisk (CSE:NOVOb) terminated its partnership with the telehealth company. The drugmaker will no longer supply Hims with access to its popular weight loss drug Wegovy over concerns of "knock-off" GLP-1s, stoking fears of the legitimacy of Hims’ platform without drugmaker partnerships, and the potential for lawsuits.

Oil drops on de-escalation 

Markets are now keen to see how the sudden decision, which came after Trump previously suggested that he would take as long as two weeks to deliberate on a possible strike on Iran, could impact sentiment, inflation and interest rates.

Much of the worry over price growth stems from oil, with traders warning in recent days that an escalation in the Israel-Iran fighting could lead to a disruption of key crude supplies, particularly along the Strait of Hormuz along Iran’s southern coast.

A subsequent spike in oil prices could refuel inflationary pressures, potentially persuading the Federal Reserve to further delay interest rate cuts.

However, seeing the muted response from Iran, Crude Oil plummeted, as investors felt the de-escalated action could result in peace.

Brent crude futures for August fell by 0.1% to $79.10 per barrel by 5:10 ET on Monday and West Texas Intermediate crude futures dropped by 8.9% to $67.28 a barrel.

Gold steady

Gold prices were softly lower. The yellow metal has been lately pressured by strength in the dollar, with broader metal prices also retreating slightly.

Spot gold rose by a meager 0.03%, pricing in at $3,369.10 an ounce, while gold futures dropped by 0.04% to $3,384.40/oz by 5:10 ET.

Bullion was still sitting on strong gains from earlier in June, as the onset of the Israel-Iran war boosted haven demand.

(Luke Juricic also contributed to this article)