Canada Stocks: TSX posts weekly decline of 3.7% on Mideast jitters

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06/03/2026 21:32

Updates at market close

TSX ends down 1.6% at 33,083.72

For the week, the index loses 3.7%

Price of oil settles 12.2% higher at $90.90 a barrel

Nine of 10 major sectors end lower

By Fergal Smith

TORONTO, March 6 (Reuters) - Canada's main stock index fell to a two-week low on Friday, with financial and industrial shares leading broad-based declines as investors worried that the jump in oil prices driven by the Middle East conflict would raise inflation pressures.

The S&P/TSX composite index .GSPTSE ended down 526.25 points, or 1.6%, at 33,083.72, posting its lowest closing level since February 17. For the week, the index was down 3.7%, after four straight weeks of gains.

U.S. President Donald Trump demanded Iran's "unconditional surrender" in a dramatic escalation of his demands a week into the war he launched alongside Israel, which could make it more difficult to negotiate a swift end to hostilities.

"With the exception of the energy sector, all the other sectors are calculating that the disruption of energy in the Middle East will continue for a long time ... which will lead to higher interest rates and inflation," said Victor Kuntzevitsky, a portfolio manager at Stonehaven, Wellington-Altus Private Counsel.

The price of oil CLc1 settled 12.2% higher at $90.90 a barrel, with Middle Eastern supply constrained by the effective closure of the Strait of Hormuz.

The U.S. economy unexpectedly shed jobs in February, potentially hinting at a deterioration in labor market conditions that could put the Federal Reserve in a difficult spot amid rising oil prices.

"If we zoom out, it's important to recognize that the TSX is one of the leading indices globally," Kuntzevitsky said. "There is a bigger theme of the petro loonie that is coming back into play and I think could persist for some time."

The commodity-linked Canadian dollar was the strongest Group of 10 currency in the past week. The TSX has added 4.3% this year after climbing 28.25% in 2025.

Nine of the 10 major sectors ended lower, including heavily weighted financials, which lost 1.9%.

Consumer discretionary .GSPTTCD was down 2.8% and industrials .GSPTTIN ended 2.4% lower.

Methanex Corporation MX.TO shares tumbled 13.4% after the methanol producer reported a quarterly loss, helping to drag the materials sector .GSPTTMT 1% lower.

Shares of Algonquin Power & Utilities Corp AQN.TO were down 11.5% after the company's quarterly results.

(Reporting by Fergal Smith and Utkarsh Tushar Hathi; Editing by Diti Pujara and Will Dunham)

((fergal.smith@thomsonreuters.com; +1 647 480 7446))