Markets Brief: Iran Deal Hopes Drive Global Rally — TSX Eyes a Strong Open | May 29, 2026
It's been a week dominated by one headline: the U.S.-Iran war and the fragile hopes of a peace deal. Heading into the long weekend, markets are ending Friday on an optimistic note, with record-setting sessions in Asia and a strong tone across North America. Here's your full wrap.
Canada — TSX
After a rough patch mid-week, the TSX bounced back Thursday — its first gain since Monday's record close — finishing up around 0.7% to the 34,770s range, driven largely by a blockbuster round of Big Six bank earnings. All six of Canada's largest banks beat analysts' estimates for Q2 (quarter ended April 30), raising dividends and signalling cautious optimism despite the volatile global backdrop.
RBC posted a standout quarter, with its Wealth Management division up 28% year-over-year. TD Bank earned $4.25 billion in adjusted net income ($2.38/share), topping expectations, and raised its dividend. CIBC's profit surged 43%, with adjusted EPS of $2.76 beating consensus by a wide margin — and the bank also announced the sale of its Caribbean division. National Bank, BMO, and Scotiabank all similarly beat expectations earlier in the week.
On the flip side, mining stocks remained a drag — gold has pulled back from its highs, weighing on names like Agnico Eagle and Barrick. Energy stocks are also under pressure as oil has retreated sharply from its wartime peak. Today (Friday), the TSX is trading in positive territory, bolstered by the broader global risk-on mood from Iran deal optimism.
Canadian angle to watch: B.C. Premier David Eby confirmed this week that Canada has struck a deal to supply liquefied natural gas to Germany, boosting the odds the Ksi Lisims LNG project on the West Coast moves ahead — good news for Canada's energy trade diversification story.
United States — Wall Street
All three major U.S. indexes closed at fresh all-time highs on Thursday, powered by the Axios report that U.S. and Iranian negotiators reached a draft 60-day memorandum of understanding — pending President Trump's sign-off. The S&P 500 gained 0.6% to 7,563, a new record. The Nasdaq added 0.9% to 26,917, also an all-time high. The Dow edged less than 0.1% higher to 50,668. U.S. futures are modestly positive Friday morning, with markets watching for Trump's response to the deal as Secretary of State Rubio holds indirect Iran talks via Pakistan.
Worth noting: April's PCE inflation — the Fed's preferred gauge — came in hot at 3.8% annually, its fastest in nearly three years, driven by elevated energy costs from the Hormuz disruption. Rate cuts remain firmly off the table for now.
Asia-Pacific
Asia stole the show on Friday. Tokyo's Nikkei 225 surged 2.5% to a record close of 66,329 — helped partly by cooler-than-expected Tokyo core inflation data for May. South Korea's Kospi jumped 3.6% to 8,476, also an all-time high, led by tech stocks including Samsung. The widespread rally reflects growing conviction that a Hormuz reopening could ease energy prices and support global growth. Both Japan and South Korea are major energy importers, so peace between the U.S. and Iran matters enormously to their economies.
Europe
European markets opened Friday in positive but measured territory. The FTSE 100 added about 0.2% to ~10,446. Germany's DAX gained 0.3% to ~25,157, and France's CAC 40 climbed 0.9% to ~8,262. European investors remain cautious: the European Commission has cut its 2026 eurozone growth forecast to just 0.9% — down from 1.4% last year — citing the "major energy shock" caused by the conflict, and 2026 inflation is now expected at 3%, up from earlier projections.
Oil & Commodities
Oil is heading for a second consecutive weekly decline as Iran deal optimism grows. WTI crude dropped about 1.4% Friday morning to roughly $87.66/barrel, while Brent slipped 1.3% to around $92.47. Both benchmarks are still well above pre-war levels — WTI was near $60/barrel a year ago — and analysts caution that even if a deal is confirmed, Hormuz reopening will be gradual. Shipowners are likely to wait for proof before re-entering the Persian Gulf. Gold futures were up modestly at ~$4,572/oz, holding steady as markets balance geopolitical risk against easing war fears.
CAD/USD
The loonie is trading just below 1.38 on the USD/CAD pair. Weaker oil is limiting the Canadian dollar's upside, while a mild USD tick higher adds pressure. USD/CAD hit a high of around 1.3870 this week — its strongest level since mid-April — before pulling back. The currency remains noticeably weaker than a year ago, which is a factor for anyone importing goods or travelling to the U.S.
The Bottom Line
This entire week's market narrative has been about one thing: Iran. Every rally has been tied to peace deal optimism; every dip, to fresh doubts. If Trump signs off on the 60-day ceasefire extension, expect a meaningful equity pop and oil sell-off next week. If talks fall apart again, the reverse. For Canadian investors, energy stocks and the loonie will be the most direct barometers. The strong Big Six earnings are a genuine bright spot — Bay Street's financial sector is in solid shape heading into the second half of 2026.
Happy long weekend! Stay financially savvy. 💛
Comments
Post a Comment