Gains in the energy and base metals sectors powered Canada's main stock index to a record level above 22,000 for the first time while the loonie reached its highest level in two months.

Ongoing geopolitical tensions, with the war in Ukraine approaching the one-month mark, have driven crude oil and commodity prices higher, said Candice Bangsund, portfolio manager for Fiera Capital. 

"The war and resulting sanctions have sent raw materials into a tailspin, and the potential for shortages has really seen prices soar higher across the board. Whether it's oil, copper, wheat, nickel, aluminum, it's been commodity prices broadly higher," she said in an interview.

Crude soared towards US$110 per barrel as leaders from Poland and the Netherlands discussed further sanctions on Russia for its war against Ukraine, including banning imports of Russia’s oil and gas and closing European ports to Russian ships. 

The energy sector led the TSX, gaining 4.3 per cent as crude prices rose 6.7 per cent and sent Vermilion Energy Inc. up 7.5 per cent.

The May crude contract was up US$6.88 at US$109.97 per barrel and the April natural gas contract was up 3.7 cents at US$4.90 per mmBTU. 

Materials was helped by gold inching higher with Lithium Americas Corp. rising 8.1 per cent.

The April gold contract was up 20 cents US at US$1,929.50 an ounce and the May copper contract was down 2.9 cents at US$4.71 a pound. 

Increases by the energy, materials, financials and industrials sectors, which together account for nearly 60 per cent of the S&P/TSX composite index, pushed it up 1190.66 points to 22,009.13. It reached a peak of 20,023.76 in earlier trading. 

Investors seemed to have brushed aside a work stoppage at Canadian Pacific Railway Ltd. as the railway's shares gained 0.72 per cent even as customers warned of potential economic impacts and called on the federal government to intervene with back-to-work legislation.

Higher crude prices lifted the Canadian dollar to its highest level since Jan. 21. It traded for 79.41 cents US compared with 79.26 cents US on Friday, according to the Bank of Canada.

In New York, the Dow Jones industrial average was down 201.94 points at 34,552.99. The S&P 500 index was down 1.94 points at 4,461.18, while the Nasdaq composite was down 55.38 points at 13,838.46.

U.S. markets, which are dominated by growth sectors like technology, came under pressure after Federal Reserve chairman Jerome Powell vowed tough action to address surging inflation.

"He called for the possibility of a much faster pace of rate hikes in order to get inflation under control and this obviously spurred some selling in the U.S. stock market," Bangsund said. 

Although Powell's message didn't really differ from what he said after the Fed raised interest rates by 25 basis points last week, she said the market interpreted his comments Monday in a hawkish light.

"I feel like today is not really a big surprise when it comes to the messaging from chair Powell. But of course I think it was a little bit more reinforced in a way that they are aware that inflation is dangerously elevated and they may need to tackle this more aggressively."

Health care was the biggest laggard on the day, losing 2.3 per cent.