Key insights
- Easing Middle East tensions, particularly Iran reopening the Strait of Hormuz, boosted global markets, including the TSX and U.S. equities. The S&P 500 and Nasdaq reached record highs. Optimism around US-Iran negotiations and a ceasefire in Lebanon contributed to the positive sentiment. The tech sector, especially semiconductor companies involved in AI hardware, showed strong performance.
Investing.com - Canada’s main stock index rallied on Friday, suggesting that the average remains on pace for a fourth straight week of advances, thanks in part to signs of easing Middle East tensions, with Iran’s foreign minister saying that the Strait of Hormuz had been temporarily reopened to commercial shipping traffic.
In a post on X, Iran’s foreign minister Abbas Araghchi said that “In line with the ceasefire in Lebanon, the passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire[.]”
Noting the decision on social media, U.S. President Donald Trump wrote: "IRAN HAS JUST ANNOUNCED THAT THE STRAIT OF IRAN IS FULLY OPEN AND READY FOR FULL PASSAGE. THANK YOU!"
By 12:16 ET (17:16 GMT), the S&P/TSX 60 index had risen up by 15 points, or 0.8%. The S&P/TSX has gained 0.9%.
On Thursday, the S&P/TSX retreated slightly by 0.3% to 34,052.23, as consumer-facing shares were hit by the prospect of elevated oil prices despite upbeat rhetoric around talks to end hostilities between the U.S. and Iran.
U.S. stocks are also in the green. The Dow has risen by 1,039 points, or 2.1%, the S&P 500 has gained 92 points, or 1.3%, and the Nasdaq is up 383 points, or 1.6%. All three are on pace for weekly gains.
The benchmark S&P 500 and tech-heavy Nasdaq Composite notched fresh record highs in the prior session, following U.S. President Donald Trump’s announcement of a pause to fighting between Israel and Lebanon. Trump also suggested that negotiations between the U.S. and Iran may resume this weekend, ahead of the expiration of their own ceasefire later this month.
Traders have turned their attention to the tech sector, which has been bouncing back from a slide at the outset of 2026 due to worries around disruptions from new artificial intelligence tools. Companies that make the hardware underpinning cutting-edge AI chips, such as Sandisk, Intel, and Micron Technology, have been among the standout performers.
Meanwhile, analysts have been taking note of broadly solid corporate results in the early days of latest quarterly earnings season. Executives at major Wall Street banks widely described the U.S. economy as resilient in the face of an energy shock brought on by the Iran war, while industrial-linked firms like J.B. Hunt logged profit despite a conflict-driven jump in fuel costs.
“I’d expect market participants to continue to focus on the broader direction of travel here, which seemingly remains towards de-escalation, and towards some form of agreement being made,” said Michael Brown, Senior Research Strategist at Pepperstone, in a note.
“So long as that remains the case, it seems that risk appetite should remain underpinned, with the ‘path of least resistance’ for equities continuing to lead to the upside, as participants increasingly focus not only on calmer geopolitical tones, but also renewed AI enthusiasm, and a thus far solid corporate reporting season.”
Washington and Tehran are “very close” to reaching a deal, Trump said, adding that Iran has agreed not to possess a nuclear weapon for more than 20 years. A desire to quell Iran’s nuclear ambitions has been cited Trump as a central reason for the war, which began with joint U.S. and Israeli strikes on Iran in late February.
In return, Iran has called for the removal of international sanctions.
Trump flagged that he would consider extending the ceasefire if Washington was close to an agreement with Tehran.
Oil prices plunged in the wake of the latest developments, below $100 a barrel.
A spike in crude following the start of the Iran war in late February has in turn driven fears of a possible spike in inflationary pressures in countries around the world and slowing global growth.
Both the International Energy Agency and the Organization of Petroleum Exporting Countries warned of softer oil demand in the coming months, while a trickle of shipping through the Strait of Hormuz -- a key transit point for a fifth of the world’s crude -- and an ongoing U.S. blockade of Iranian ports may hit supplies.
Gold has risen strongly on Friday, leaving it on pace for a weekly gain, with some investors appearing to once again return to bullion after a sharp dip last month.
Bets that central banks would respond to energy-driven inflation by hiking interest rates weighed on gold throughout much of the first month of the Iran war. Bullion tends to underperform in elevated rate environments.
At the same time, the U.S. dollar firmed, buoyed in part by the view that heavy energy exports would help immunize the U.S. economy from oil supply disruptions through the Strait of Hormuz. A stronger dollar can make gold more expensive for overseas buyers.
However, the currency has retreated as hopes grow for progress in peace between the U.S. and Iran.
Away from the war, investors are keeping tabs on a slew of quarterly corporate earnings.
Shares of Netflix fell in premarket U.S. trading and early European trading, after the streaming giant outlined revenue growth projections that were below expectations and announced that Chairman Reed Hastings would not seek re-election.
The group left its full-year outlook unaltered, and flagged that its second-quarter operating margins would be lower than the same period last year.
Netflix noted that "growth in content amortization will be first-half weighted due to the timing of title launches,” adding that it expects the second quarter to “have the highest year-over-year content amortization growth rate in 2026, before decelerating to mid-to-high single digit growth in the second half of the year."
At the same time, Netflix said in a letter that Hastings, who co-founded Netflix as a DVD-by-mail business nearly three decades ago and has overseen its transformation into an entertainment industry juggernaut, will step down from the firm’s board after his term expires in June.
Aluminum producer Alcoa also dipped on first-quarter profit and revenue which underwhelmed analysts due to higher costs and softer demand.
Elsewhere, U.S.-listed shares of Sweden’s Autoliv popped after the world’s biggest producer of airbags and seatbelts reported higher-than-anticipated first-quarter returns.
While the economic calendar is relatively quiet, traders will likely be keeping tabs on commentary from San Francisco Federal Reserve President Mary Daly, Richmond Fed President Tom Barkin, and Federal Reserve Governor Christopher Waller.