Israel and Iran trade strikes, threatening to drag region back to war
Iran responds to Israel's latest missile attack with fresh strikes on northern Israel
Israel-Iran ceasefire tested by missile launchesIsrael and Iran traded fire early Monday in retaliatory strikes that threatened to drag the wider Middle East back into a regional war.
Israeli authorities said three waves of Iranian missiles targeted the country, and urged the public to seek shelter. Explosions could be heard in central Israel as Israeli air defences sought to intercept the incoming Iranian fire.
The Iranian attack came after Israel launched strikes on central and western Iran early Monday in response to missile fire from Tehran, in the most serious crossfire since an April 8 ceasefire was reached in the Iran war.
Tehran warned of retaliation after Israel struck Beirut's southern suburbs on Sunday without warning in defiance of Washington's request days ago to stand down.
Monday marked the 100th day of the Iran war, launched Feb. 28 when Israel and the United States killed Supreme Leader Ayatollah Ali Khamenei and other senior Iranian leaders.
Israel-Iran ceasefire tested by missile launchesThe war raged until reaching a nominal ceasefire on April 8, but a permanent end to the hostilities have been challenged by Iran's chokehold on the Strait of Hormuz, through which a fifth of all traded oil and natural gas once passed in peacetime, as well as fighting between Israel and the Lebanese Shia militia Hezbollah.
With global energy supplies threatened, Iran still holding a vast stockpile of highly enriched uranium and even Yemen's Houthi rebels apparently getting involved in the fighting Monday, the risks of the war fully erupting again appears to be rising.
Iranian state television reported the sound of explosions being heard in Isfahan, Karaj, Tabriz and Tehran, without immediately elaborating. A witness in Tehran described hearing at least one large blast somewhere to the west of the country's capital city.
Iran closed the airspace around Tehran's Imam Khomeini International Airport, the country's main airfield, after the Israeli attack.
Iranian officials offered no details on what had been struck, nor any damage information. Iran's paramilitary Revolutionary Guard said that Israel used air-launched ballistic missiles in its attack Monday morning, without elaborating.
The semiofficial Fars and Mehr news agencies said Israeli strikes had hit a petrochemical factory in city of Mahshahr in Khuzestan province. It did not elaborate on damage.
The Israeli military later confirmed the strike on the petrochemical plant.
Earlier Monday, sirens sounded across Israel after its military said a missile launched from Yemen targeted the country, without elaborating. Israel's rescue services said there were no reports of casualties or impacts from the launch from Yemen.
Yemen is home to the Iranian-backed Houthi rebels. The Houthis have fired missiles at Israel during the Israel-Hamas war and later, but haven't been fully involved in the Iran war. The Houthis did not immediately claim the attack, though it can take them hours or even days to acknowledge their assaults.
In Saudi Arabia, missile alert sirens sounded Monday morning in an area home to an air base that hosts U.S. forces. Saudi state media reported the alert around its Al Kharj governorate, home to Prince Sultan Air Base. The alert came after Israel's strikes on Iran. Saudi Arabia shortly after said the missile danger in the area had passed, without elaborating.
Trump: Netanyahu 'doesn't call the shots' on Iran
The White House did not respond to messages about the strikes and whether they were done in co-ordination with the United States.
For days, negotiations between Iran and the U.S. over the fragile ceasefire in the war had been stalled by the fighting between Israel and the Lebanese Shia militia Hezbollah. Israel now occupies southern Lebanon and had moved into areas of the country it hadn't held in a quarter century, leading to fears about them further widening their campaign.
On Sunday, Israel launched airstrikes in Beirut's southern suburbs. Iran retaliated with its own strike on Israel, which led to Monday morning's attack by Israel on Iran.
Iran launches strikes on Israel in retaliation for Beirut bombardmentTrump earlier told a Fox News Channel reporter that he wanted the Iranians to stop firing missiles and return to the negotiating table. He also said that Israel's strikes in Lebanon earlier Sunday were not coordinated with the U.S. and "I'm not happy about it."
Stock Market Today: Dow Rises On Trump, Iran Comments; Marvell Surges On S&P 500 Addition (Live Coverage)
Stock Market Today: Futures Surge After Indexes Plunge Friday; Oil Prices Pare Gains After Trump Says Israel, Iran 'Looking to Do an Immediate Ceasefire'
Canadian, U.S. markets fall amid sharp declines in tech stocks, interest rate fears
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man walks past a building in Toronto that used to house the Toronto
Stock Exchange on August 18 2011.THE CANADIAN PRESS/Aaron Vincent Elkaim
TORONTO — Canadian and U.S. stock markets fell on Friday, as tech stocks plummeted and employment data spurred fears of higher interest rates.
Mona Mahajan, head of investment strategy at Edward Jones, said stock markets fell on a combination of two factors.
“We’re seeing a pretty dramatic sell-off in the U.S. semiconductor index in particular. Obviously, that index has had a parabolic move higher. Semiconductors have been really the star of the AI story since the start of the year and certainly over the last few weeks in particular,” she said.
Tech stocks dragged the broader market lower as companies that had powered the S&P 500 to a series of records the past two months saw losses. Nvidia fell 6.2 per cent, Broadcom dropped 7.9 per cent and Micron Technology slid 13.3 per cent for the biggest loss among stocks in that index, which was down 200.57 points or 2.6 per cent overall. The S&P 500 closed the day at 7,383.74.
Also in New York, the Dow Jones industrial average was down 695.15 points at 50,866.78, while the tech-heavy Nasdaq was down 1,121.53 points or 4.1 per cent at 25,709.43.
The U.S. stock market had its worst day since October on Friday.
And in Toronto, the S&P/TSX composite index was down 803.61 points, or 2.3 per cent, at 34,413.45.
Mahajan said the other factor is that jobs data came out better than expected in Canada and the U.S. on Friday. The reports, she said, will have “some implications on how the central banks may react.”
“But the silver lining to us is that ... unemployment remains steady, the consumer probably still feels relatively healthy given a steady labour market and we haven’t seen signs of a wage price spiral with wage gains being relatively contained,” Mahajan said.
Bond yields jumped after a report showed the U.S. added a surprising 172,000 jobs in May, according to the U.S. Labor Department. Longer-term, the market sees a better than 60 per cent chance the U.S. Federal Reserve will push rates higher by the end of the year, according to CME FedWatch, and little to no chance of a cut.
Statistics Canada said Friday that the labour market rebounded with a gain of 88,000 jobs in May. The agency said the unemployment rate fell to 6.6 per cent in May, down from 6.9 per cent in April.
Separately, Wall Street has been anticipating that negotiations to end the U.S. war with Iran will eventually be successful. American and Iranian negotiators reached a tentative deal last week to extend their ceasefire, but the agreement has not been finalized.
“The geopolitical uncertainty is an overhang, but what’s interesting is markets of course are forward-looking and we have a good sense of how they’re viewing the world looking forward,” Mahajan said.
“If you look at the WTI oil futures curve, for example, (it is) pricing in high US$70 per barrel oil prices by year’s end, so really implying that there’s some mean reversion coming in oil prices.”
The price of Brent crude, the international standard, fell two per cent to settle at US$93.09.
The July crude oil contract was down US$2.50 at US$90.54 per barrel.
On the TSX, the basic materials sector led the overall index lower, which Mahajan said was weighed down by a sell-off in gold prices.
The August gold contract was down US$139.70 at US$4,365.30 an ounce.
The Canadian dollar traded for 71.82 cents US compared with 71.96 cents US on Thursday.
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Daniel Johnson, The Canadian Press
With files from The Associated Press.
This report by The Canadian Press was first published June 5, 2026.
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