S&P/TSX composite tumbles 2 per cent, U.S. markets also down on Mideast war fears

The exterior of the TMX is seen in Toronto. THE CANADIAN PRESS/Chris Young

TORONTO — Canada’s main stock index dived, then pared back some of its losses to finish trading just over two per cent lower on Tuesday as investors worried about a widening of the war between Iran and the United States and Israel.

The cost of crude oil was up as Iran launched a series of retaliatory attacks, including a drone strike on the U.S. Embassy in Saudi Arabia. 

The April crude oil contract was up US$3.33 at US$74.56 per barrel, while the April gold contract was down US$187.90 at US$5,123.70 an ounce.  

The S&P/TSX composite index was down 756.33 points at 33,784.94.

In New York, the Dow Jones industrial average was down 403.51 points at 48,501.27. The S&P 500 index was down 64.99 points at 6,816.63, while the Nasdaq composite was down 232.17 points at 22,516.69.

The Canadian dollar traded for 73.08 cents US compared with 73.06 cents US on Monday.     

Anish Chopra, managing director with Portfolio Management Corp., says fears of a longer conflict between the U.S. and Iran are driving a risk-off sentiment in Canadian and U.S. stock markets.   

“Markets are trading in a risk-off mode as investors are concerned by the conflict in the Middle East, the fact that it’s escalating and the potential that it could last for longer than what people were anticipating,” Chopra said. 

“As a result of that, you’re seeing significantly higher oil and gas prices, and the concern around oil and gas prices rising is a resurgence in inflation.” 

He added that higher inflation could impact the path of interest rates. 

This report by The Canadian Press was first published March 3, 2026.

Daniel Johnson, The Canadian Press. With files from The Associated Press.