Trump says Iran war "close to over" amid hopes for more negotiations
Investing.com - Canada’s main stock exchange is trading higher on Monday, while oil has continued to climb, as investors begin a holiday-shortened week gauging the possible trajectory of the war in Iran.
By 12:38 ET (17:38 GMT), the S&P/TSX 60 index had ticked up by 17.6 points, or 1.0%.
The commodities-heavy index was underpinned by a fresh jump in global benchmark crude prices, underlining ongoing market anxiety around the continued closure of the Strait of Hormuz, a vital waterway off of Iran’s southern coast through which roughly one-fifth of the world’s oil passes.
Over the past one-month period, the S&P/TSX composite average has slid by more than 6%.
Worries have abounded that an energy price shock sparked by the war will lead to a bout of interest rate hikes by central banks around the world, weighing on equities. The Bank of Canada is now see delivering three rate increases in 2026, versus earlier estimates that policy would be unaltered.
Gold prices, which tend to underperform in higher rate environments, have also cratered, further denting a TSX index which includes well-known miners of the yellow metal.
U.S. stocks mostly higher
U.S. averages ticked mostly higher on Monday, as the fighting in the Middle East entered a second month.
By 12:40 ET (17:40 GMT), the Dow had added 305 points, or 0.7%, the S&P 500 had risen by 12.9 points, or 0.2%, and the Nasdaq 100 had declined by 19 points, or 0.1%.
The main averages on Wall Street sank at the end of last week, even after President Donald Trump’s decision to delay until April 6 a deadline for Iran to reopen the Strait of Hormuz or face U.S. attacks on domestic power facilities.
"[M]arkets remain very much on edge about the Middle East, and the consensus view is still that the conflict is set to escalate," analysts at Vital Knowledge said in a note to clients.
A sharp spike in oil since the outbreak of the conflict in late February has sparked worries over renewed inflationary pressures in countries around the world, which could in turn spur on central bank interest rate hikes. Government bond yields have risen against this backdrop, including U.S. Treasuries, weighing on stocks.
Traders are no longer pricing in any rate easing by the Federal Reserve this year, versus expectations for two drawdowns prior to the war, according to CME’s FedWatch Tool. Key labor market and business activity data is due out this holiday-shortened week, and Fed Chair Jerome Powell is set to speak later in the day.
Brent hovers above $115
With the conflict in the Middle East raging, the Wall Street Journal has reported that President Donald Trump is considering a potentially complex and risky military operation to remove almost 1,000 pounds of uranium from Iran.
Meanwhile, troops from the U.S. 31st Marine Expeditionary Unit are said to have arrived in the Middle East, in a move reportedly aimed at giving Trump more options as he mulls over the next phase of the war. A Washington Post report said the Pentagon was preparing for weeks of ground operations in Iran.
Tehran has vowed to destroy any U.S. forces that attempt to stage a ground incursion into the country.
At least 12 U.S. troops were injured in an Iranian attacks on an air base in Saudi Arabia over the weekend. Iran-aligned Houthi rebels in Yemen joined the fray for the first time as well, firing attacks at Israel and exacerbating already heightened fears around disruptions to key energy supplies.
Should the Houthis target the Bab al-Mandab Strait in particular, the Vital Knowledge analysts flagged that a global shipping crisis already caused by the effective closure of the Strait of Hormuz off the southern coast of Iran would be "dramatically amplif[ied]." The Bab al-Mandab Strait is a key choke point for vessel traffic which connects the Red Sea to the Gulf of Aden and the Indian Ocean.
Brent crude futures expiring in June is trading around $107.05 a barrel by 12:44 ET.
Gold rises
Gold prices gained, fueled by a bout of bargain-hunting as investors assessed bullion prices that were on pace for the biggest monthly drop in almost twenty years.
Spot gold gained 1.2% to $4,548.23 an ounce by 12:45 ET (17:45 GMT), while gold futures advanced 1.2% to $4,578.72/oz. Spot gold had fallen as low as $4,000/oz last week before rebounding back to near $4,500/oz by Friday, although it has fallen by more than 14% over the past one-month period.
OCBC analysts said gold’s rebound from last week’s lows appeared to be largely technical, especially with prices down sharply since start of the Iran conflict in late February. They noted that bearish momentum appeared to be showing some signs of easing, with gold’s relative strength index recovering from oversold territory.
But they warned that it was uncertain whether gold’s recovery could be maintained, noting key resistance levels for spot gold at $4,624/oz, $4,670/oz, and $4,850/oz.
“A more durable recovery would likely require prices to reclaim and hold above these levels. Failing which, gold may continue to trade on a softer footing,” OCBC analysts said.
Trump says Iran talks have shown "great progress"
President Donald Trump touted "progress" in potential negotiations with Iran, but reiterated a threat to carry out strikes on a range of targets in the country if a deal is not reached shortly.
In a Truth Social post, Trump said the U.S. was engaged in "serious discussions with A NEW, AND MORE REASONABLE, REGIME to end out Military Operations in Iran," adding that "great progress has been made."
However, he warned that "if for any reason a deal is not shortly reached, which it probably will be, and if the Hormuz Strait is not immediately ’Open for Business,’ we will conclude our lovely ’stay’ in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!), which we have purposefully not yet ’touched.’”
The president added that such strikes would be in "retribution" for "our many soldiers, and others" who have been killed by Iran.
Earlier, Iranian First Vice President Mohammad Reza Aref said countries attacking Iran must promise not to invade the country and recognize its international rights should they want to engage in discussions over a possible reopening of the Strait of Hormuz.
