TORONTO — Stock markets in Canada and the U.S. moved lower on Thursday as oil prices fluctuated amid hopes for a deal between the U.S. and Iran.

The hope is that an end to the war will reopen the Strait of Hormuz and allow oil tankers trapped in the Persian Gulf to deliver crude again to customers. Oil and gasoline are still much more expensive than they were before the war began because of the strait’s closure.

Allan Small, senior investment adviser at iA Private Wealth, said markets were giving back some of their recent gains.

“Sometimes markets drop just based on profit-taking. When we heard yesterday, for example, that this deal (or) treaty, whatever you want to call it, was on the table, markets reacted very positively, so now it’s like, OK, it’s not confirmed yet,” he said.

“It’s the old saying ‘buy the rumour, sell the news’ … probably buyers were buying in based on what they were or are anticipating, and today they’re selling a little bit.”

The S&P/TSX composite index was down 125.20 points at 33,856.62.

In New York, the Dow Jones industrial average was down 313.62 points at 49,596.97. The S&P 500 index was down 28.01 points at 7,337.11, while the Nasdaq composite was down 32.75 points at 25,806.20.

The June crude oil contract was down 27 cents US at US$94.81 per barrel.

Brent’s price briefly fell near US$96 per barrel Thursday after a spokesperson for Pakistan’s Foreign Ministry said, “We expect an agreement sooner rather than later.” Pakistan has been mediating talks between the United States and Iran. But Brent later erased much of that drop and briefly topped US$102, which in turn sent stocks lower on Wall Street.

The price for a barrel of Brent crude oil settled at US$100.06, down 1.2 per cent.

Despite all the uncertainties about the war, a powerful parade of U.S. companies reporting even bigger profits than analysts expected has helped support the U.S. stock market. Stock prices tend to follow the path of corporate profits over the long term.

Several reports on the U.S. economy came in mixed. One said more U.S. workers applied for unemployment benefits last week, but the increase was not as bad as economists expected. Another report suggested that productivity for U.S. workers improved by only half of what economists expected for the latest quarter.

Meanwhile, Small said investors will be closely watching the release of labour data out of the U.S. and Canada on Friday.

“I think there’s a concern that jobs are being lost in many industries, many companies laying off people, perhaps due to artificial intelligence taking those jobs, perhaps due to a slowing economy, perhaps due to higher inflation, whatever the causes are,” he said.

“So it will be interesting to see what the numbers look like for us and the United States.”

The Canadian dollar traded for 73.34 cents US compared with 73.39 cents US on Wednesday.

The June gold contract was up US$16.60 at US$4,710.90 an ounce.

This report by The Canadian Press was first published May 7, 2026.

— With files from The Associated Press.

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

Daniel Johnson, The Canadian Press