Trump delays missile strike against Iran, Toronto stock market rises

Investing.com - Major Canadian stock indexes rose on Monday after U.S. President Donald Trump announced that he has temporarily delayed military strikes on Iran’s key energy facilities following “productive” talks.

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The S&P/TSX Composite Index rose 1.43% to 31,764.25 points.

As the index gained, gold recovered some of its early losses, while oil prices fell sharply. Analysts say Trump may be trying to find ways to ease the conflict that has lasted nearly a month and swept through much of the Middle East.

U.S. stocks rise

U.S. stocks surged on Monday, rebounding strongly after a tough week, as hopes for de-escalation in the Middle East swept through the markets. President Donald Trump said the U.S. had held “productive” talks with Iran, and “the likelihood of an agreement is very high.”

The benchmark S&P 500 rose 1.7% to 6,616.65, the tech-heavy Nasdaq Composite increased 1.8% to 22,030.97, and the blue-chip Dow Jones Industrial Average gained 2% to 46,475.99.

Trump tweeted that the talks over the past two days on “completely and thoroughly resolving” hostilities were “productive.”

He said, based on the “tone and spirit” of these conversations, they will continue this week, and he has instructed the Pentagon to “delay any and all” military strikes against Iran’s power plants and energy infrastructure for five days.

However, according to The Wall Street Journal, Iran’s Fars News Agency reported that despite Trump’s claims, Tehran has not engaged in direct discussions with the U.S.

Earlier, Trump threatened that if Tehran does not reopen the Strait of Hormuz by Monday night, the U.S. will launch new strikes on Iran’s energy infrastructure and power plants. The Strait of Hormuz, a narrow waterway in southern Iran through which one-fifth of global shipping passes, has become a key flashpoint in the conflict.

Iran’s threats to target ships attempting to pass through the strait have effectively halted traffic, cutting off critical energy imports to countries worldwide and casting a shadow over the global economic outlook. There are widespread concerns that a sharp rise in oil prices could trigger inflationary shocks, slow growth, and prompt central banks to raise interest rates again.

However, initial market reactions to Trump’s post seem to suggest investors see it as a sign that hostilities may be easing. Notably, Trump’s post did not mention the Strait of Hormuz or specify who in Washington is handling negotiations.

Oil prices retreat

Following Trump’s comments, oil prices fell sharply. The global benchmark Brent crude futures dropped 6.3% to $99.70 per barrel. Meanwhile, U.S. WTI crude futures declined 7.1% to $91.29 per barrel.

According to The Wall Street Journal, Iran’s Fars News Agency reported that there has been no direct or indirect communication with the U.S. The agency added that after Trump threatened retaliatory strikes on similar facilities in the Middle East, he has abandoned targeting Iranian power plants.

Media reports indicate that since the conflict began, there has been only sporadic indirect communication between the sides.

Vital Knowledge analyst said, “Remember, even if fighting ends now, the economic impact of the past few weeks will still be significant, but at least there is hope for resolution.”

Gold recovers some of early losses

After President Donald Trump announced that Washington had held “good and productive” talks with Iran and ordered a temporary delay of any military strikes on Iran’s power plants and energy infrastructure, gold prices recovered some of their early losses.

As of 8:47 a.m. Eastern Time (20:47 Beijing time), spot gold was down 1.0% at $4,449.10 per ounce, and gold futures fell 2.7% to $4,488.81 per ounce. Spot gold had previously fallen to its lowest level since late December.

Meanwhile, spot silver rose 1.9% to $69.0655 per ounce.

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