Why TSX Stocks Rebounded on Tuesday

TSX stocks started climbing back, as investors perhaps believe the worst of the worst is over, and it’s time for an economic recovery.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published March 9, 2022 8:00 am EST

TSX stocks rebounded on Tuesday after United States president Joe Biden continued to impose sanctions on Russia due to the Ukraine crisis.

What happened?

Biden banned imports of Russian oil and energy on Tuesday, which led to a comeback among TSX stocks. Many investors became quite fearful over the past week or so with the ongoing Ukraine crisis. This led to an increase in gold and other assets, and the fall of practically everything else.

While the TSX remained down to February levels, but nothing substantial, the S&P 500 fell to lows not seen in the April 2021. But all indexes saw growth on Tuesday after some fell into a bear market territory.

So what?

It’s been a wild time for many TSX stocks. Energy stocks started soaring, as many Western nations banned Russia oil from their list of sanctions. With Biden on board, it’s more of a unity sanction with Europe. The U.S. only takes in about 7.9% of oil imports from Russia, whereas Europe relies more heavily on the product.

But as energy TSX stocks soar, analysts continue to remind investors that this may not be for long. The fall in other areas acted as a reminder the markets are filled with volatility. So, energy may be up for now, but with the ongoing Ukraine crisis, oil prices could very well fall once more.

Still, the increase in interest rates could possibly help fight off the inflation fears. That would help companies return to a state of calm and perhaps bring some investors back on board.

Now what?

The rebound in TSX stocks comes after huge drops across the board from inflation fears. Global turmoil could lead to even more supply chain disruptions, leading to a mixture of COVID-19, supply chain woes and a war in the way of company revenue. Therefore, volatility won’t simply disappear even after this rebound.

Still, this rebound just shows that many investors may believe the worst of the dip may be over. We’re perhaps in a new state of chaotic calm, with an ongoing Ukraine crisis, ongoing pandemic and ongoing supply chain issues — nothing good, but nothing new. So, perhaps it’s nothing investors can’t handle.

While that remains to be seen, it’s a good time for long-term investors to perhaps pick up some strong TSX stocks while they remain at these low levels.