S&P/TSX composite drops nearly 500 points, U.S. markets fall as oil prices rise

People walk in the financial district of Toronto. THE CANADIAN PRESS/Andrew Lahodynskyj

Stock markets in Canada and the U.S. fell on Thursday, while oil prices rose, amid uncertainty as to when the U.S.-Iran war may end.

Michael Currie, senior investment adviser at TD Wealth, said oil prices have been dictating much of the recent swings in the market adding that prices for the key commodity have been moving in a tight range. 

“Oil goes up, you see bonds, you see stocks, you see everything go down. The opposite happens the next day (when) it goes in reverse,” he said. 

Despite recent volatility, Currie said the stock market typically dips about five per cent every three to four months, “so the actual amount of the drop year to date historically isn’t much.” 

The S&P/TSX composite index was down 495.08 points at 31,887.52.

In New York, the Dow Jones industrial average was down 469.38 points at 45,960.11. The S&P 500 index was down 114.74 points at 6,477.16, while the Nasdaq composite was down 521.75 points at 21,408.08.

Earlier in the week, U.S. President Donald Trump announced productive talks about ending the war. But Iran denied direct talks were underway and then dismissed a U.S. proposal for a ceasefire that was delivered via Pakistan.

“They better get serious soon, before it is too late,” Trump said on his social media network about Iran’s negotiators, “because once that happens, there is NO TURNING BACK, and it won’t be pretty!”

On Thursday, the fighting continued, and thousands more U.S. troops neared the region. Iran, meanwhile, tightened its grip on the crucial Strait of Hormuz. It may be creating something like a “toll booth” for tankers to get past the narrow waterway, which typically sees a fifth of the world’s oil exit the Persian Gulf through it to customers worldwide.

Later in the day, Trump said he would extend his deadline for Iran to open the Strait of Hormuz to April 6.

The May crude oil contract was up US$4.16 at US$94.48 per barrel. 

The rise in oil prices worsened worries about high inflation and sent Treasury yields higher in the bond market.

The yield on the 10-year Treasury jumped to 4.42 per cent from 4.33 per cent late Wednesday and from just 3.97 per cent before the war started. 

On Wall Street, tech stocks were the heaviest weights on the market.

Meta Platforms fell eight per cent, and Alphabet sank 3.4 per cent after each had held relatively steady the day before, when a jury found Instagram and YouTube liable in a landmark social-media addiction trial.

The financial penalties were small compared with the companies’ vast profits, but it could herald a watershed moment that invites more lawsuits.

In the Canadian stock market, the basic materials sector was leading to the downside. Currie said the decline was largely due to weakness in gold stocks that had been leading the market for the first few months of the year. The April gold contract was down US$176.00 at US$4,376.30 an ounce. 

“The only good news there is it’s just giving back the gains, it’s not actually dropping,” he said.  

The Canadian dollar traded for 72.23 cents US compared with 72.46 cents US on Wednesday.  

This report by The Canadian Press was first published March 26, 2026.

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