U.S. markets reopen this Tuesday after the Memorial Day long weekend to a cautiously optimistic tone, with S&P 500 futures pointing higher and oil prices pulling back on signals that a U.S.–Iran ceasefire framework may be within reach. The TSX is open for regular trading, while European markets also add gains. Here is your full daily rundown.
Canada — TSX & Loonie
| Index / Rate | Level | Change |
|---|
| S&P/TSX Composite | 34,471 | +0.18% |
| CAD / USD | 0.7241 | +0.07% |
| Bank of Canada Rate | 2.25% | On hold |
The TSX opened for a full session today — Victoria Day was observed last week (May 18) and is now in the rear-view mirror. The composite index finished Friday at 34,471, buoyed by strength in materials and financials, while the energy sub-index lagged slightly as crude prices retreated. The Canadian dollar is trading near 72.4 U.S. cents (USD/CAD ~1.38), finding modest support from elevated oil prices even as a stronger greenback — underpinned by the U.S. Federal Reserve's higher-for-longer stance — caps the loonie's upside.
The Bank of Canada has held its policy rate at 2.25%, carefully watching how the U.S.–Iran conflict and ongoing tariff uncertainty ripple through the domestic economy. While headline inflation has been nudged higher by gasoline costs, core inflation gauges have actually slowed to their lowest levels in five years, giving the Bank room to hold steady. Analysts at National Bank see USD/CAD converging toward 1.35 in the second half of 2026 if energy revenues improve Canada's trade balance, though renewed geopolitical uncertainty could delay any meaningful loonie recovery.
United States — Wall Street Reopens
ℹ️ Holiday note: U.S. markets were closed Monday, May 25 for Memorial Day. Friday's closing levels are the official prior close. Trading resumes today, Tuesday, May 26.
| Index | Friday Close | Friday Change |
|---|
| S&P 500 | 7,473.47 (record) | +0.37% |
| Dow Jones Industrial Avg. | 50,579.70 | +0.58% |
| Nasdaq Composite | 26,343.97 | +0.19% |
| 10-Year Treasury Yield | 4.51% | — |
| 2-Year Treasury Yield | 4.06% | — |
The S&P 500 closed Friday at a fresh record high of 7,473, extending a run that has powered through months of Middle East turmoil. Futures this morning are pointing to another positive open, with S&P 500 and Dow futures each up roughly 0.5%. Prediction market Polymarket placed a 91% probability on the index opening higher today — reflecting broad investor optimism after President Trump said over the weekend that U.S.–Iran talks were "proceeding nicely."
The major macro story in Washington continues to be the Federal Reserve. New Fed Chair Kevin Warsh was sworn in on May 22, inheriting an economy where March CPI ran at 3.3% year-over-year — a figure accelerated largely by a 21% monthly spike in gasoline prices tied to the Hormuz crisis. The FOMC's last vote was a split 8–4 decision to hold rates steady, with hawkish dissenters signalling no appetite for near-term cuts. The 30-year Treasury yield touched near a 19-year high earlier this month, though it has eased since on diplomacy optimism.
Oil & Commodities
| Commodity | Price | Change |
|---|
| WTI Crude Oil | ~$91.39 / barrel | –6% Mon, slight recovery Tue |
| Brent Crude | ~$97 / barrel | Below $97 on deal hopes |
| Gold | $4,531 / oz | Near recent highs |
| Bitcoin (CAD) | ~$106,819 | +0.56% |
Oil is the headline commodity story of the day. WTI futures plunged more than 6% on Monday after Trump signalled that U.S.–Iran ceasefire talks were advancing, with a framework reportedly being discussed that would extend the truce by two months while Iran reopens the Strait of Hormuz and the U.S. lifts its naval blockade. Today WTI has stabilized near $91/barrel after that sharp drop, while Brent is also hovering below $97. However, key sticking points remain — particularly Iran's nuclear program and its demand to retain authority over the vital waterway. Fresh U.S. and Israeli strikes on Iranian vessels have kept investors cautious about declaring the crisis over. For Canadian context, oil in Canadian dollar terms is still near C$140/barrel, a level only briefly reached during the 2022 Ukraine invasion.
Gold remains near record territory above $4,500/oz, sustained by inflation fears and safe-haven demand. Bitcoin has pushed above C$106,000.
Europe — Catching Up
ℹ️ Holiday note: The UK market (FTSE 100) was also closed Monday for a bank holiday. London futures are catching up in Tuesday's session.
| Index | Friday Close | Change |
|---|
| FTSE 100 (London) | 10,466 | +0.22% Fri; futures higher Tue |
| DAX (Germany) | 24,888 | +1.15% Fri; +~2% Tue morning |
| CAC 40 (France) | 8,115 | +0.37% Fri |
| Euro STOXX 50 | 6,019 | +0.99% Fri |
European equities extended last week's strong run — the pan-European STOXX 600 rose 3% over the week — and Tuesday's session is opening with further gains as Iran deal optimism supports risk appetite. Germany's DAX is up close to 2% in early Tuesday trading. The European Commission has trimmed its 2026 Eurozone GDP forecast to 0.9% (down from 1.4% in 2025), citing the energy shock from the Middle East conflict as a significant drag. Eurozone inflation has been revised up to 3% for 2026. The European Central Bank has held its policy rate on hold and is monitoring developments carefully, with markets pricing in two rate hikes before year-end. Peripheral sovereign spreads narrowed on Monday as risk appetite improved.
Asia-Pacific — Mixed on Fresh Strikes
| Index | Weekly Performance |
|---|
| Nikkei 225 (Japan) | +3.14% last week |
| TOPIX (Japan) | +0.74% last week |
| Asian markets broadly (Tue) | Mixed — fresh U.S. strikes on Iran vessels tempered optimism |
Asian markets had a strong week last week, with the Nikkei bouncing more than 3% on de-escalation hopes. Tuesday's session opened more cautiously, however, after reports of fresh U.S. military "self-defence" strikes on Iranian missile sites in southern Iran introduced uncertainty. The risk-on tone present in futures and European markets has not fully carried over to Asian trading, underscoring that the geopolitical situation remains fluid. The Australian dollar is under pressure after the Reserve Bank of Australia raised its rate by 0.25% to 4.35% — its third consecutive hike of 2026 — with staff forecasting CPI to peak near 4.8% in Q2.
📌 The Big Picture
Markets in 2026 have been defined by a single theme: the U.S.–Iran conflict and its ripple effects on energy, inflation, and central bank policy. After a brutal selloff in late February/early March that briefly wiped out all of the S&P 500's 2026 gains, equities have staged an impressive recovery — the S&P 500 is now at record highs and the Dow has crossed 50,000 — driven by a combination of tech resilience, AI-sector enthusiasm, and diplomatic optimism over the Strait of Hormuz.
The key risks to watch in the sessions ahead: whether the U.S.–Iran ceasefire framework solidifies (U.S. Secretary of State Marco Rubio indicated a deal could be reached within "a few days"), how new Fed Chair Kevin Warsh positions himself on rates, and whether Canadian energy exports can sustain the loonie's partial recovery. For Canadian investors, the TSX energy sector and the CAD/USD rate remain the most direct levers to follow.
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