The Toronto Stock Exchange’s main index climbed 218 points to close at 33,695.76 on Friday, marking a 0.65% gain as investors shifted focus toward Middle East peace negotiations and oil price volatility. The rally represented the TSX’s strongest weekly performance in recent months, driven primarily by outsized gains in the energy sector.

Canadian energy stocks dominated trading activity as crude oil prices fluctuated between $96 and $98 per barrel amid ongoing concerns about supply disruptions through the Strait of Hormuz. Canadian Natural Resources led large-cap gainers with a 1.62% advance to $64.16, while Cenovus Energy added 0.9% and Baytex Energy surged 2.51%. The S&P/TSX Capped Energy Index jumped 1.49%, significantly outpacing the broader market as traders positioned for continued geopolitical risk premiums.

The energy sector’s strength reflects renewed investor confidence in Canadian oil producers’ ability to capitalize on elevated commodity prices while maintaining disciplined capital allocation. Major producers have pivoted away from aggressive expansion spending, instead focusing on shareholder returns through dividends and buybacks. This strategy has proven particularly effective during the current cycle, with Canadian Natural Resources maintaining its two-decade dividend growth streak while generating robust free cash flow at current price levels.

Also Read: Best long term Canadian stocks

Market participants will be watching closely for developments in U.S.-Iran negotiations this week, as any de-escalation could trigger profit-taking in energy names. However, analysts note that Canadian producers’ improved cost structures allow profitability even with WTI crude at $40 per barrel, providing downside protection for long-term investors.

Also Read: Stock investment Canada for beginners

The telecommunications sector also contributed to Friday’s gains, with Telus advancing 0.86% on strong subscriber growth trends.