TSX Composite Falls 626 Points as Iran Tensions Spike Oil—July 9

Canada’s S&P/TSX Composite Index fell 626.71 points to 34,645.88 on July 8 after US President Donald Trump declared the Iran ceasefire agreement over during a NATO summit in Ankara. The announcement triggered a sharp rally in crude oil prices, with Brent crude jumping 5.6% to $78.33 per barrel. The selloff rippled across North America, with the Dow dropping 576.76 points and the S&P 500 falling 0.28%, as investors fled risk assets amid renewed Middle East tensions.

Why the TSX dropped 626 points

Trump’s declaration that the US-Iran memorandum of understanding was “over” sent shockwaves through global markets on July 8. The US had launched strikes on Iran overnight in response to attacks on three commercial vessels in the Strait of Hormuz. Trump later threatened additional strikes, saying “we’re probably going to hit them hard again tonight.” The geopolitical escalation spooked investors, causing the TSX to fall 1.77% in late-morning trading while the broader market sentiment turned negative across all major North American indices.

Oil surge pressures energy-sensitive stocks

Crude oil prices jumped sharply as supply concerns resurfaced. Brent crude rose 5.6% to $78.33 per barrel, while West Texas Intermediate climbed 5.4% to $74.25 per barrel. The US Treasury revoked a temporary license allowing Iran to export oil globally, adding to supply disruption fears. Energy stocks initially benefited, but broader market weakness offset gains. Canadian investors face particular exposure to oil price swings given the TSX’s energy sector weighting and the country’s crude exports.

Global markets tumble on geopolitical risk

The selloff extended worldwide. Europe’s STOXX 600 fell 1.22%, Germany’s DAX dropped 1.74%, and France’s CAC 40 retreated 2.01%. Japan’s Nikkei closed 2.11% lower. Only Hong Kong’s Hang Seng rose 2.99% as beaten-down tech shares attracted bargain hunters. The International Monetary Fund lowered its global growth forecast to 3% from 3.1% in April, citing Middle East conflict and pressurized AI spending.

What the technical picture shows for the TSX

Meyka data shows the TSX with a C+ grade and a 12-month forecast of 37,338.07, implying 7.2% upside from current levels. The RSI stands at 51.52, indicating neutral momentum, while the ADX at 14.67 suggests no clear trend. The Bollinger Bands upper band sits at 35,491.74, offering resistance. With the index down 0.95% on the day, the technical setup remains weak in the near term, though the 50-day moving average at 34,514.48 provides support.

Final Thoughts

The TSX’s 626-point drop reflects genuine geopolitical risk, not a fundamental shift in Canadian valuations. Oil volatility will remain a key driver for the index. With Meyka grading the TSX a C+ and forecasting 37,338 by year-end, the data suggests limited downside from here if tensions stabilize.

FAQs

Disclaimer:

The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.