Written By
Nick Raffoul
Nick Raffoul is the Founder and Lead Analyst at Best Canadian Stocks. He graduated with a degree in Business Administration, has over a decade of writing experience, and grew his personal portfolio 153% from 2020 to 2024.
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The S&P/TSX Composite slipped to 34,735 on Monday, down 0.1% and trading below the psychologically important 35,000 mark (data as of June 1, 2026). The culprit? A sharp spike in oil prices driven by stalled US–Iran talks and renewed escalation in the Middle East, according to reports. That combination has revived the stagflation worry—higher inflation meeting higher borrowing costs—just eight days before the Bank of Canada’s June 10 rate decision.
The story isn’t the headline index move. It’s the sector split beneath it, and what a sustained oil and inflation impulse could mean for the rate path and your portfolio.
The Oil and Energy Angle
Oil jumped on Monday as geopolitical uncertainty returned to center stage (data as of June 1, 2026). Stalled diplomatic talks between the US and Iran, combined with fresh Middle East tensions, sent crude prices higher and reignited inflation concerns that many investors thought were behind us.
For Canada—a major energy exporter—higher oil prices are a double-edged sword. Energy stocks typically benefit, but the broader economy faces pressure from renewed inflation, which complicates the Bank of Canada’s ability to ease policy going forward. That tension showed up clearly in how different sectors traded.
Banks and Rate-Sensitives Take a Hit
The Canadian bank stocks had a rough session. Royal Bank fell 1.3%, Scotiabank dropped 1.5%, CIBC slid 2.5%, and TD lost 2.8% (data as of June 1, 2026). Financials are highly sensitive to interest rate expectations, and Monday’s oil-driven inflation scare reminded the market that the path to lower rates may not be as smooth as hoped.
The Bank of Canada holds rates at 2.25% and has kept policy unchanged through four consecutive decisions, most recently on April 29. The June 10 meeting is just over a week away, and a hold is widely expected—roughly 97% priced in by markets (data as of June 1, 2026). But if oil and inflation pressures persist, the timing of any future easing could be pushed further out, weighing on rate-sensitive sectors like financials.
Gold and Miners Retreat
Gold stocks also pulled back. Agnico Eagle Mines fell 3.6% and Wheaton Precious Metals dropped 3.8% (data as of June 1, 2026). Gold often acts as a hedge against uncertainty, but Monday’s move suggests investors rotated away from defensive plays, possibly on profit-taking or shifting expectations about the inflation-rate trade-off.
The Tech Bright Spot
Not everything was red. Shopify surged 4.4% on news that Nvidia is rolling out advanced PC processors designed for AI workloads (data as of June 1, 2026). The AI optimism that has powered tech stocks globally continued to support Canada’s marquee e-commerce platform, showing that secular growth themes can override macro headwinds—at least for now.
Shopify’s move is a reminder that the TSX isn’t monolithic. While energy uncertainty and rate concerns weigh on some sectors, technology and innovation-driven Canadian stocks can still catch bids when the narrative shifts.
What It Means Before June 10
We’re now in the narrow window before the Bank of Canada’s next decision. A hold is nearly certain, but the bigger question is forward guidance. If oil prices stay elevated and inflation concerns resurface, the BoC may signal more caution about the pace of any future easing. That would extend the higher-for-longer environment and keep pressure on rate-sensitive sectors.
Our view: this isn’t the moment to panic, but it is the moment to understand your sector exposure. The divergence between financials, miners, and tech on Monday shows how quickly sentiment can shift based on macro inputs. A sustained oil and inflation impulse complicates the easing path—not definitively, but enough to warrant attention.
What Investors Can Do
Diversification across sectors is your first line of defense in this environment. If you’re overweight financials or energy, consider whether that concentration reflects your risk tolerance and outlook. If you’re using investing apps to manage a self-directed portfolio, now is a good time to review allocations and rebalance if needed.
Don’t trade headlines. Geopolitical shocks create noise, but they rarely dictate long-term portfolio performance. Focus on fundamentals, stay informed on the June 10 BoC decision, and avoid making reactionary moves based on single-day index swings.
Volatile markets are exactly when a self-directed account earns its keep. Open a Questrade account today and get $50 in free trades—Canada’s low-commission broker for taking control of your portfolio.
Bottom Line
The TSX dipped below 35,000 on an oil spike and sector rotation, not systemic weakness. Banks and gold miners fell, tech rallied, and the June 10 BoC decision looms. The key is understanding what you own, why you own it, and how your portfolio responds to macro shifts like this one.
Stay disciplined, stay diversified, and stay informed.
Data as of June 1, 2026. Sources: Trading Economics (S&P/TSX June 1 close and session sector moves); market reports.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions.
Written By
Nick Raffoul
Nick Raffoul is the Founder and Lead Analyst at Best Canadian Stocks. He holds a degree in Business Administration and has over a decade of writing experience. Nick began investing just before the COVID-19 market crash in March 2020, growing his personal portfolio 153% by 2024. In 2022, he founded Best Canadian Stocks to make data-driven investing accessible to all Canadians. His goal is to help all of his readers achieve financial freedom, maximize their spending power, and reach their financial goals. Whether you're maximizing your TFSA, building an RRSP to save for retirement, or looking to buy your first stock, Nick has your back. His work covers Canadian equities, dividend investing, tax-advantaged accounts, and personal finance.
