Markets are opening September on edge. The U.S. and Iran exchanged direct attacks over the weekend for the first time in a month, a tanker was struck by projectiles in the Strait of Hormuz on Monday, and President Trump threatened further strikes — sending oil higher, bond yields to fresh highs, and stocks lower on both sides of the border heading into Wednesday's Bank of Canada decision.
Canada: TSX Falls for a Second Straight Session
The S&P/TSX Composite closed Monday at 36,270.48, down 283.44 points (-0.78%), as renewed Middle East tensions hit financials and mining stocks. Canada's Big Banks slid despite widespread expectations the Bank of Canada holds rates Wednesday: TD fell 0.6%, while BMO and Scotiabank each lost 1.2%. Gold miners also retreated as bullion cooled from last week's records — Agnico Eagle dropped 1.9%, Barrick fell 2.2%, and Wheaton Precious Metals slid 2%.
| Index | Close | Change |
|---|
| S&P/TSX Composite | 36,270.48 | -283.44 (-0.78%) |
U.S. Markets: Monday's Selloff, Tuesday's Cautious Open
Wall Street closed lower Monday as the renewed Iran conflict rattled investors, even as all three major averages still logged strong August gains. Tuesday's futures pointed to a soft open, with tech names leading declines as bond yields climbed — the 10-year Treasury yield touched its highest level since January 2025.
| Index | Monday Close | Change |
|---|
| Dow Jones | 53,185.90 | -374.09 (-0.70%) |
| S&P 500 | 7,686.14 | -0.33% |
| Nasdaq Composite | 26,370.89 | -0.12% |
| Russell 2000 | 2,956.45 | -0.54% |
| VIX (Volatility Index) | 14.92 | +3.40% |
Tuesday premarket: Dow futures were down about 240 points (-0.5%), S&P 500 futures off roughly 0.5%, and Nasdaq-100 futures down nearly 1%, with Nvidia, AMD and Micron each falling more than 1% and Microsoft and Alphabet also lower.
Europe and Asia: Yields and Oil Weigh on Sentiment
European bond yields extended their climb overnight, with Germany's benchmark yield hitting a 2011 high and pressuring equity futures lower to start the session. Asia-Pacific markets fell broadly Tuesday on the same worries: Japan's Nikkei 225 dropped about 0.6% to below 66,000 (from Monday's 66,311.93 close), led by chip and AI-related names such as Tokyo Electron (-4.6%), Advantest (-2.9%) and Fujikura (-3%). Japan's 10-year yield reached its highest level since August 1996. Hong Kong's Hang Seng fell 0.46%, mainland China's CSI 300 slipped 0.19%, and South Korea's Kospi dropped more than 1%, while Australia's ASX 200 eased 0.36%.
Commodities and the Loonie
Oil prices rose Tuesday morning after the U.S. and Iran resumed direct hostilities. A tanker was struck by three unknown projectiles in the Strait of Hormuz on Monday, and Trump threatened additional strikes on Iranian energy infrastructure after the two countries traded attacks Sunday for the first time in roughly a month.
| Commodity/Currency | Level | Change |
|---|
| Brent Crude | $91.52 USD/bbl | +1.14% |
| WTI Crude | $87.01 USD/bbl | +1.46% |
| Gold | ~C$6,169/oz | holding near recent levels |
| Silver | ~C$92.62/oz | — |
| USD/CAD | ~1.3901 (loonie ~71.9¢ US) | softer |
What It Means for You
Higher oil prices on the back of renewed Iran-related conflict push at the pump right as the federal gas tax holiday ends Sept. 7 — so fill-ups could get costlier from two directions at once. Rising bond yields globally are also nudging fixed mortgage rates, so anyone renewing this fall may want to lock in a quote sooner rather than later. And if you hold gold or gold-miner ETFs in a TFSA or RRSP, today's pullback is a reminder that even a strong multi-week rally can give back gains quickly on shifting rate expectations.
What to Watch This Week
- Wednesday, Sept. 2: Bank of Canada rate decision — an eighth straight hold at 2.25% is widely expected, though the fresh oil-driven inflation risk adds a wrinkle.
- This week: Fed rate-hike odds for September have been climbing since Chair Kevin Warsh's hawkish Jackson Hole remarks reiterating a commitment to bringing down inflation.
- Sunday, Sept. 7: Federal gas tax holiday expires.
- Tuesday, Sept. 8: Canada's retaliatory tariffs on roughly $20 billion of U.S. goods (steel, dairy, appliances, agricultural equipment, pulp and paper, electronics) are set to take effect.
- Ongoing: developments in the U.S.-Iran conflict and Strait of Hormuz shipping risk, which are driving today's oil and bond-yield moves.
Market data as of Monday, Aug. 31 close and Tuesday, Sept. 1 premarket trading. Figures are subject to change; this is not investment advice.
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