Gains in the energy and mining sectors helped lift Canada's main stock index into slightly positive territory Tuesday, outweighing the negative impact of Scotiabank's worse-than-expected third-quarter financial results.

The S&P/TSX composite index closed up 10.43 points at 19,985.35. Immediately after the opening bell, the TSX leaped ahead, helped along in part by energy stocks benefiting from Tuesday's surge in the price of crude oil. 

The U.S. benchmark West Texas Intermediate was trading at US$93.60 on Tuesday, up more than three-and-a-half per cent — an indication that concerns about global energy supplies aren’t going away any time soon, in spite of WTI’s pullback this month from its spring highs.

“There’s been a little bit of a tug of war on energy," said Philip Petursson, chief investment strategist at IG Wealth Management. 

"You’ve had some investors saying ‘how much further can it (the price of oil) go? Is it done?' But then when you look at the fundamentals, oil markets are still really tight. I think the long-term prospects for oil are higher, and I think the market is coming to that conclusion.”

The S&P/TSX energy index was up 3.02 per cent at day's end, while the capped materials index — which is made up of Canadian mining and metals stocks — was up 2.39 per cent.

However, the S&P/TSX composite as a whole lost many of its early-morning gains throughout the day, in part due to the performance of Scotiabank, which lost 5.25 per cent of its share value Tuesday on the release of its third-quarter earnings.

While Scotiabank reported net income of $2.59 billion for the quarter ending July 31, up from $2.54 billion in the same quarter last year, its adjusted earnings of $2.10 per diluted share came in below analyst expectations of $2.11 per share.

The bank's global wealth management and global banking and markets divisions saw income drop, by 14 per cent and 26 per cent respectively.

"(Scotiabank) is taking the market down almost single-handedly," said Petursson. "And it is pulling some of the other banks down with it, on fears that some of the weakness we see on Scotiabank could emerge from some of the other banks as well."

In New York, markets were largely flat Tuesday after a significant pullback the previous day against the backdrop of ongoing inflation fears. 

The Dow Jones industrial average closed down 154.02 points Tuesday at 32,909.59. The S&P 500 index closed down 9.26 points at 4,128.73, while the Nasdaq composite closed down 0.27 points at 12,381.30.

Petursson called Tuesday a "wishy-washy" day for Wall Street, adding investors appear to be in a holding pattern waiting for Friday’s meeting of the U.S. Federal Reserve in Jackson Hole, Wyo. 

All eyes are on that meeting, he added, to see if Fed Chair Jerome Powell makes any comments that might indicate what the U.S. central bank plans to do to tackle inflation that remains stubbornly high, well above its target.

"I think the market is holding onto a hope that the Fed is close to the end of their rate-hiking cycle. That’s what’s been priced in since the (market) lows of June, and we’re just looking for further confirmation of that," Petursson said.

He added that while there is more of an acceptance now among investors that the economy is heading into a weaker phase, markets will remain unsettled until there's more certainty about the degree of weakness.

"The question now is, 'is it just a mild recession, is it a soft landing, or is it something deeper than that?'" Petursson said. "My view is that the Fed can get close to a soft landing, or a very, very mild recession, but we just need the economic data to continue to confirm that."

The Canadian dollar traded for 77.09 cents US compared with 76.72 cents US on Monday.

The October crude contract was up US$3.38 at US$93.74 per barrel and the September natural gas contract was down 49 cents at US$9.19 per mmBTU.

The December gold contract was up US$12.80 at US$1,761.20 an ounce and the September copper contract was up four cents at US$3.70 a pound.