Canadian stocks surged Friday, wiping out the full decline that had accumulated since the Middle East conflict erupted. Market participants saw the jump after Iran announced the Strait of Hormuz would remain open to commercial vessels, a move that lifted expectations that the flare‑up could deescalate. The Toronto Stock Exchange gained more than 1% in early trade.

The announcement arrives after weeks of uncertainty that the region’s oil supplies might be throttled, a threat that has kept commodity prices high and pressured Canadian energy stocks. By confirming freedom of navigation, Tehran has removed a key risk factor, prompting investors to reallocate capital toward domestic equities for the first time in months again.

Analysts note that the recovery could boost the Canadian dollar and lift the benchmark S&P/TSX composite. With oil and gas companies rebounding, the sector’s weight in the index increases, potentially tightening the market’s sensitivity to global energy trends. Investors now view the Strait’s status as a decisive factor in regional stability for Canadian investors today.

The decision underscores Tehran’s willingness to keep trade lanes fluid while it navigates diplomatic pressures. For Canadian firms that rely on uninterrupted oil transport, the move signals lower operational risk. Market watchers will monitor whether the optimism translates into sustained gains or if geopolitical tensions resurface, reshaping the sector’s outlook for Canadian investors today again.