The Canadian stock market staged a powerful turnaround on Monday, with the S&P/TSX Composite Index jumping 633 points, up 2% to 31,950, as investors rushed back into energy stocks and risk sentiment improved. The rebound comes after a sharp wave of selling that pushed the index down to 31,317 on Friday, marking one of the most volatile stretches in recent weeks.
The sudden shift highlights how quickly sentiment is changing across global markets. Last week’s losses were driven by geopolitical fears and a collapse in precious metals, but Monday’s rally is being powered by surging oil prices and selective buying in key sectors. This sharp reversal has put energy stocks back in focus while leaving gold-linked names under pressure.
Market shift: TSX moves from heavy selling to strong rebound as oil strength replaces gold weakness as the dominant driver.
Gold crash triggered heavy selling across TSX
The biggest drag on the market recently has been the sharp fall in gold prices. Spot gold declined nearly 10% over the past week, pushing its month-to-date losses to around 15%. This collapse triggered aggressive selling across mining stocks, dragging the materials sector sharply lower and contributing heavily to the broader TSX weakness.
Some of the worst-performing stocks included AbraSilver Resources, Americas Gold and Silver, Lithium Americas, and Vizsla Silver, each falling by at least 6.8%. The magnitude of these declines shows how sensitive TSX remains to commodity price swings, especially in the metals segment.
Orla Mining jumps despite gold weakness
In contrast to the broader mining selloff, Orla Mining (TSX: OLA) surged 4.5% to $19.29, making it the top-performing TSX stock. The rally followed strong fourth-quarter 2025 results that stood out even as gold prices dropped.
The company reported 95,405 ounces of gold production and record free cash flow of US$133.4 million. Quarterly revenue reached US$378.5 million, while net profit came in at US$79.2 million. For the full year, Orla produced 300,620 ounces, exceeding expectations and reinforcing confidence in its operations.
Its balance sheet also improved significantly, ending the year with US$420.8 million in cash and US$35.8 million in net cash, which supported investor sentiment despite broader sector weakness.
Energy stocks and oil prices drive the rebound
The key driver behind Monday’s rally is strength in oil markets. WTI crude oil prices are trading near multi-year highs, supported by tight global supply conditions and geopolitical disruptions. According to the International Energy Agency, current supply constraints leave little room for short-term relief, keeping energy prices elevated.
This surge in oil is helping energy-heavy TSX regain momentum. Stocks such as Cenovus Energy, Canadian Natural Resources, and PetroTal have remained highly active, reflecting strong investor interest in the sector.
At the same time, inverse oil ETFs such as BetaPro Crude Oil Bear ETF (HOD) jumped 15.19%, highlighting volatility and active positioning in oil-linked trades. Natural gas inverse ETF HND also rose 8.42%, signaling increased hedging activity.
Top active TSX stocks: Canadian Natural Resources, I-80 Gold, Montage Gold, Cenovus Energy, and Denison Mines dominated trading volumes, showing strong participation in both energy and mining sectors.
Mixed sector performance highlights market imbalance
Despite the rebound, sector performance remains uneven. While energy stocks are gaining strength, materials continue to struggle due to falling gold prices. Technology and healthcare stocks also faced pressure in the previous session, contributing to broader volatility.
Other notable gainers included SECURE Waste Infrastructure, Maple Leaf Foods, and CES Energy Solutions, each rising by more than 2.2%, indicating selective buying beyond just the energy sector.
Extreme movers and unusual activity
The session also saw some sharp individual stock movements. First Mining Gold surged 12.66%, while Volatus Aerospace gained 6.17%. PetroTal rose 5.10%, benefiting from oil strength.
On the downside, Transcontinental Inc. showed an unusual move, dropping 80.13%, highlighting isolated volatility in specific names. Meanwhile, iShares S&P/TSX 60 ETF gained 1.67%, reflecting broader index recovery.
Oil vs gold divergence shaping TSX direction
The most important trend for investors right now is the widening gap between oil and gold performance. While crude remains elevated, gold continues to decline sharply. This divergence is creating a split market, where energy stocks lead gains and mining stocks drag on performance.
Investors are closely tracking oil futures via platforms like CME crude oil markets, as energy prices remain the key short-term driver for TSX direction.
Market outlook remains tied to geopolitics
With no major economic data releases scheduled, the focus remains on geopolitical developments, particularly in the Middle East. Any escalation could further disrupt energy supply and increase volatility across global markets.
For now, the TSX rebound reflects a shift in sentiment rather than a complete recovery. The market remains highly sensitive to commodity prices and geopolitical headlines, meaning sharp moves in either direction could continue in the near term.
The balance between rising oil prices and falling gold will likely determine whether the current rally can sustain momentum or if volatility returns to dominate trading once again.
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