Canadian and U.S. markets rally on tech optimistim, hope for Hormuz reopening

TORONTO – Canada’s main stock index and its U.S. counterparts rallied Tuesday as investors pushed aside some of their concerns about a frothy tech market and became cautiously optimistic the Strait of Hormuz could soon reopen.

Indexes on both sides of the border rose with the S&P/TSX composite index up 575.45 points at 35,801.59, pushed higher by the technology and base metals sectors.

In New York, the Dow Jones industrial average was up 907.47 points at 54,085.88. The S&P 500 index was up 136.02 points at 7,736.52, while the Nasdaq composite jumped 671.10 points to 26,584.99.

“All markets are doing relatively well. Even industrials are having a good day,” said Dustin Reid, chief strategist for fixed income at Mackenzie Investments, ahead of the closing bell.

“Financials are doing well. Most indices are higher. Materials are doing well, even consumer discretionary stocks are doing well.”

Reid attributed the increases to tech shares having a very strong day and investors feeling good about Iran and Oman’s negotiations to open the Strait of Hormuz, a key shipping passage blocked by war in the Middle East.

Tech stocks were on a tear earlier in the year as massive investments and spending around artificial intelligence buoyed the sector. Lately, some investors have had second thoughts about the optimism, but that wasn’t on full display Tuesday.

Canadian tech stocks like Constellation Software Inc., Celestica Inc., Thomson Reuters Corp. and Shopify Inc. were all up alongside U.S. giants such as Palantir Technologies Inc. and SpaceX. 

“There seems to be a bit of a reversal from the tone that we’ve had over the last week or two around concerns over some of the tech shares,” Reid said. “Tech’s having a very, very strong day, leading or at least close to leading not only in the U.S., but also in Canada as well.”

The other big factor shaping markets was news that Iran and Oman are nearing a deal that would reopen the Strait of Hormuz and possibly help spur the end of the war.

There’s been a lot of progress toward deals before, but this one seems different, Reid admitted.

“People seem to be a little bit more optimistic about this one than some of the other back and forths we’ve had since June, in my opinion,” he said. “I think the market can be quite euphoric on this if there’s some sort of a deal.”

The Canadian dollar traded for 71.08 cents US, compared with 71.28 cents US on Friday.

The September crude oil contract was down US$4.57 at US$75.77 per barrel.

The December gold contract was up US$62.10 at US$4,152.60 an ounce.

Looking ahead, Reid had his eye on Canada’s latest tranche of labour market data, which is due to be released Friday, but said the big indicator would be what happens with the conflict in the Middle East.

“The market’s probably going to extend its gains on a deal, or if a deal doesn’t look good or the Iranians say no deal or there really wasn’t much of a deal to start with, then I think we could see things retrace,” he said.

This report by The Canadian Press was first published Aug. 4, 2026.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)