Canada’s main stock index closed higher on Tuesday, supported by gains in financial and telecommunications sectors as oil prices retreated from their recent highs. The S&P/TSX Composite Index rose 179.33 points, or 0.5 percent, to finish at 36,107.96, just below last Friday’s close, which marked the index’s strongest level in over three weeks.

Market participants appeared to be positioning for the historically favorable seasonal period ahead, with November and December typically showing positive returns. Analysts noted that recent fluctuations in interest rates have added complexity to market dynamics, especially as investors anticipate the Bank of Canada’s policy decision next week.

The yield on Canada’s 10-year government bond declined 6.8 basis points to 3.894 percent, easing after a sharp increase on Monday amid rising expectations of a potential interest rate hike by the central bank.

In the United States, the Dow Jones Industrial Average advanced 1 percent, contributing to a broadly positive session on Wall Street. U.S. crude oil futures slid 1.8 percent to settle at $101.79 per barrel, following a series of geopolitical developments. Traders weighed the impact of a meeting between Iran’s President and Pakistan’s military chief — a key mediator in U.S.-Iran negotiations — against ongoing attacks by Houthi rebels targeting Saudi Arabian energy infrastructure.

The decline in oil prices helped ease pressure on interest rates, bolstering sectors such as utilities and telecommunications that had been underperforming in recent months. Sid Mokhtari, chief market technician at CIBC Capital Markets, noted that the drop in rates boosted these heavily sold-off areas, suggesting potential for renewed investor interest amid a market environment that appeared oversold.

Overall, the market’s upward momentum reflects a combination of easing bond yields and moderating energy prices, as investors look to the year-end period with cautious optimism.