Canadian equities suffered their worst day since April's tariff turmoil, with the S&P/TSX Composite index tumbling as much as 4.1% Tuesday. The selloff was triggered by escalating Middle East tensions that sent investors fleeing even traditional safe havens like gold and energy stocks. The index erased half a month's gains in a single session.

Commodity-linked stocks bore the brunt as materials and energy sectors, which make up over 35% of the index, plunged. Spot gold prices dropped 6.1% to their lowest point as a strengthening US dollar made the metal less attractive to foreign buyers. The Bloomberg dollar index surged 1.3%, its biggest gain since February 2025.

Mining stocks led the carnage with the materials sector falling as much as 9.5%. First Majestic Silver Corp. and Aya Gold & Silver Inc. saw double-digit declines. Even energy stocks slipped 2.1% despite West Texas Intermediate crude jumping 9.5% to its highest level since June 2025 as Middle East conflict threatened oil production.