Futures contracts tracking Canada’s primary stock index moved upward on Thursday as traders digested corporate earnings from energy and mining companies and weighed renewed conflict in the Middle East that has kept energy prices elevated.
By 08:07 ET (12:07 GMT), the S&P/TSX 60 index standard futures contract was up 10 points, or roughly 0.5%. The improvement coincided with corporate results that beat expectations, including second-quarter profits reported by Vermilion Energy and Kinross Gold. Additional quarterly reports were scheduled after the market close from Eldorado Gold and Baytex Energy.
U.S. futures and tech headline moves
Across the border, U.S. equity futures advanced, buoyed in part by a pronounced jump in Microsoft shares after the company posted strong quarterly earnings and reiterated commitments around artificial intelligence expenditures. At 05:54 ET (09:54 GMT), S&P 500 futures were higher by 31 points, or 0.4%. Nasdaq 100 futures had increased by 208 points, or 0.8%, and Dow futures were up 146 points, or 0.3%.
Those gains, however, were constrained. Persistent concerns over an escalating Middle East conflict and hawkish cues associated with the Federal Reserve’s latest policy decision limited upside. Sentiment in the technology sector was further dented by a sharp decline in Meta Platforms, which weighed on broader tech-linked benchmarks.
Futures regained some ground after a prior sell-off on Wall Street that had been driven by outsized losses in technology stocks, notably chipmakers. In parallel, equities in Asia experienced volatile trade, with the chip-heavy KOSPI swinging between gains and losses, while European markets posted modest upticks.
Energy prices and geopolitical developments
Oil, which had surged the previous session on renewed Middle East violence, retreated by midmorning. As of 08:19 ET, Brent crude futures were down 0.7% at $90.08 per barrel and U.S. West Texas Intermediate futures had eased about 1.0% to $83.63 per barrel. Both benchmarks rose sharply on Wednesday amid the uptick in regional hostilities.
The military dimension of the confrontation intensified early Thursday local time, when U.S. forces reported a heavy round of strikes on dozens of Islamic Revolutionary Guards Corps targets across Iran. The strikes were described as hitting military command centers, missile and drone facilities, and coastal surveillance and defense sites.
Those actions followed a sequence of events in which Iran launched ballistic missiles toward U.S. forces in the Middle East; the missiles were intercepted, and U.S. and Saudi forces then conducted retaliatory strikes against Iran-backed militias in Iraq that Washington said were involved in attacks on American troops and Saudi energy infrastructure. U.S. President Donald Trump told Fox News on Wednesday that Iran would be hit "hard" after Tehran’s missile attack on U.S. forces in Jordan.
The conflict spilled beyond the Gulf, with Egyptian authorities reporting drone strikes on two natural gas vessels operating off the country’s coast.
Gold and the Fed’s messaging
Gold prices were modestly higher as market participants reconsidered Federal Reserve commentary following a decision to leave interest rates unchanged. The precious metal initially rallied when Treasury yields retreated and the U.S. Dollar Index weakened immediately after the Fed’s policy announcement, improving the relative appeal of non-yielding bullion.
That rally subsequently faded as investors absorbed remarks from Fed Chair Kevin Warsh, who reiterated the central bank’s commitment to returning inflation to its 2% target despite pausing on rate changes. Market pricing shifted notably after the Fed decision: the probability of a September rate hike fell to about 64%, down from approximately 81% prior to the announcement, as measured by CME FedWatch.
What this means for markets
- Canadian equity futures were higher, supported by better-than-expected earnings in energy and mining sectors.
- U.S. futures rose, helped by Microsoft’s results, but broader gains were capped by geopolitical escalation and Fed commentary.
- Oil eased from a recent spike tied to Middle East conflict, while gold saw a muted gain as investors weighed the Fed’s inflation guidance.
Investors continued to balance corporate fundamentals against geopolitical risk and central bank guidance. The flow of earnings from commodity-focused companies and further corporate updates after the close are likely to influence trading as the day progresses.
Key points
- TSX 60 futures rose by 10 points, or 0.5%, at 08:07 ET (12:07 GMT).
- Vermilion Energy and Kinross Gold reported stronger-than-expected Q2 profits; Eldorado Gold and Baytex Energy were due to report after the bell.
- U.S. futures gained but were limited by Middle East tensions and Fed messaging; S&P 500 futures were up 31 points at 05:54 ET (09:54 GMT).
Risks and uncertainties
- Escalation of military action in the Middle East, which has already influenced oil and shipping risks, may continue to pressure energy markets and regional trade routes.
- Fed communications on inflation and rate policy remain a source of volatility; market-implied odds for a September hike shifted materially after the policy announcement.
- Tech sector weakness, including declines in major names, could prolong risk-off moves that ripple through equities, especially cyclical and growth-sensitive areas.