TSX ends higher amid oil price drop

Investing.com - Canada’s main stock exchange ended higher on Monday, after three consecutive sessions ​of decline last week, helped by decline in oil prices.

Tthe S&P/TSX Composite index had gained 1.03%, its biggest daily gain since February 26, before the conflict began, to end at 32,876.65 points

U.S. stocks also gained at the open, as some risk appetite returned to markets that remain wary of a joint U.S.-Israeli air campaign against Iran that is entering its third week.

The blue-chip Dow Jones Industrial Average had gained 0.83%, the benchmark S&P 500 had climbed by 1.01%, and the Nasdaq Composite had ticked up by 1.22%.

The main averages on Wall Street fell last week, pulled down by a sharp surge in oil prices due to concerns over global supply constraints. The Strait of Hormuz, a key waterway south of Iran through which a fifth of the world’s tanker traffic passes, has remained effectively shuttered by Tehran, crimping energy flows and threatening the worldwide economy.

Although the U.S. has moved to soothe supply fears, including through the easing of some sanctions on Russian oil, crude has continued to stay higher than there it was before the start of the conflict in late February. Gasoline-pump prices, which factor into overall inflation readings and are a major focus for American voters ahead of the crucial 2026 midterm elections in November, have increased as a result.

Oil slips

Brent crude prices retreated from earlier gains in whipsaw trading, although the global benchmark remained just above the $100 a barrel level. U.S. West Texas Intermediate crude futures were also lower by 4.4% at $92.62 a barrel.

U.S. President Donald Trump has called on several countries to help Washington reopen the Strait of Hormuz. However, in comments to reporters on Air Force One on Sunday, Trump did not say if any have agreed to his request.

He also told the Financial Times that member nations of the North Atlantic Treaty Organization should assist in reopening the strait, adding that "it will be a very bad for the future of NATO" should these nations either not respond or refuse to aid Washington.

China was singled out by Trump, with the president suggesting he could scrap a planned summit with Chinese counterpart Xi Jinping in April if Beijing does not use its influence to unblock the strait. The New York Times reported that tankers carrying oil to China have been allowed to pass through the strait, while others have been hit by projectiles.

The Wall Street Journal, citing the European Union’s top diplomat, said the bloc is mulling options to restart shipping through the Strait of Hormuz. By choking off most tanker traffic through the geographic passageway, Tehran has effectively deprived large economies, especially in Europe and Asia, of key sources of energy.

Nvidia’s Huang to speak

Beyond the conflict engulfing the Middle East, Nvidia CEO Jensen Huang will step back into the spotlight at the artificial intelligence semiconductor giant’s annual developer conference beginning on Monday, with investors keen to see what new offerings the company plans to roll out to combat intensifying competition.

This year, Huang will take the stage as Nvidia is racing to maintain its longstanding lead in the AI race, and fend off rivals in the rapidly-burgeoning space for AI-enhanced chips. Along with peers like Advanced Micro Devices and Intel, Nvidia now has to contend with mega-cap technology companies, such as Alphabet’s Google, which are actively working to introduce their own processors optimized for AI.

The emergence of "inference" in the AI industry, or the ability of AI bots to perform tasks on behalf of humans, presents another headwind for Nvidia. These models often run on chips different from the ones Nvidia has been churning out, while some of its customers like OpenAI and Facebook-parent Meta Platforms have said they could release their own versions of these AI processors.

Nvidia shelled out $17 billion in December to buy Groq, a startup specializing in allowing for cheap and quick inference work. Last month, Huang said he would demonstrate how Groq’s technology can be plugged in to Nvidia’s CUDA platform.

Nvidia has also invested some $2 billion in companies Lumentum and Coherent, two manufacturers of lasers that can use beams of light to rapidly send information between chips. While these lasers could speed up the connections between Nvidia’s chips, these are not yet made at the same volume as Nvidia’s popular processors.

"We expect Nvidia to announce a further broadened AI portfolio," analysts at BofA Securities said in a note.

Meta is considering major layoffs that could affect more than a fifth of its workforce as the company ramps up spending on artificial intelligence infrastructure, Reuters reported over the weekend, citing people familiar with the matter.

The company’s shares rose in premarket trading by more than 3% by 05:18 ET.

The potential cuts have not been finalized and no timeline has been set, the report said. Top executives have recently signaled their plans to senior leaders and asked them to begin preparing how to pare back, as Meta looks to offset costly AI infrastructure bets and prepare for greater efficiency from AI-assisted workers.

Spot gold stabilizes

Spot gold prices steadied after briefly falling below key levels on Monday, with focus squarely on more developments in the Iran war.

Caution before a Federal Reserve meeting this week also weighed on gold, with markets fearing a potentially hawkish outlook from the central bank in the face of sticky inflation.

Spot gold gained 0.3% to $5,033.31 an ounce by 10:07 ET, while gold futures fell 0.4% to $5,040.31/oz. Spot prices had briefly fallen below $5,000/oz earlier in the session.