Futures contracts linked to Canada’s main equity benchmark opened lower Wednesday as investors grappled with heightened tensions in the Middle East. By 08:43 ET (12:43 GMT), the S&P/TSX 60 index standard futures contract was down 4 points, or about 0.2%.
Markets arrived at those early losses after the Toronto Stock Exchange’s S&P/TSX composite index closed at a fresh record the day prior, advancing 0.4% to finish at 34,899.07 points on Tuesday. The previous session’s gains were supported primarily by strength in the financials and energy sectors, which underpinned the benchmark’s climb to an all-time high.
Across the border, U.S. futures were trading on both sides of unchanged as investors balanced exuberance around artificial intelligence-linked demand against the renewed geopolitical friction in the Gulf. By 06:33 ET (10:33 GMT), Dow futures were lower by 182 points, or about 0.4%, S&P 500 futures had slipped roughly 7 points, or 0.1%, while Nasdaq 100 futures were higher by 63 points, or 0.2%.
Equity benchmarks in the United States arrived at Wednesday’s session following a strong run: on Tuesday the S&P 500 recorded an all-time closing high for the ninth straight session, marking its longest streak of record closes since May 2025. The Dow Jones Industrial Average rose 0.4% to register its own record closing high, and the Nasdaq Composite moved up marginally. All three major averages logged all-time closing highs for five consecutive sessions - a sequence not seen since 2017.
One of the key drivers behind recent U.S. market strength has been the surge in chip stocks. An index tracking semiconductor companies rose 5.9% in the most recent session, reflecting investor expectations for a wave of investment into the infrastructure needed for advanced AI models. Since hitting a 2026 low in March, the PHLX Semiconductor Index has climbed by more than 90%.
Marvell Technology stood out during the rally, with its shares jumping following comments from Nvidia’s CEO that positioned the company as potentially on track to become the "next trillion-dollar company." Separately, Broadcom is scheduled to report earnings after the closing bell, a release likely to attract considerable attention given the sector momentum.
Economic data due later in the day included a gauge of activity in the services sector and a private-sector payrolls print for May, both items that market participants said they would be watching for clues about near-term economic momentum.
Fresh strikes between the U.S. and Iran
Geopolitical developments added a layer of uncertainty. The U.S. military said that Iranian air attacks on Kuwait, Bahrain and other targets had either been repulsed or failed, Reuters reported. U.S. forces were also said to have disabled an empty oil tanker that attempted to breach a blockade of Iranian ports.
State-run Iranian media reported that the Islamic Revolutionary Guard Corps had struck the U.S. Fifth Fleet headquarters in Bahrain in response to a U.S. attack on a communications tower on Qeshm Island. Those exchanges have dampened market hopes that a diplomatic resolution to the conflict between Washington and Tehran might be imminent.
President Donald Trump emphasized that talks between the two sides remain underway. In a podcast released on Wednesday, he said Iran had agreed not to obtain a nuclear weapon - a core sticking point in negotiations - though Iran’s response to that claim was described as unclear in reporting.
Analysts at Vital Knowledge summed up market reaction succinctly, saying: "[S]tocks are encountering a bit of pressure following (another) kinetic exchange between the U.S. and Iran."
Brent crude futures reacted to the flare-up as well, trading near $100 a barrel and reviving concerns that an energy-driven acceleration in inflation could emerge. President Trump predicted oil would fall back once the Iran conflict ends and argued that inflation is not "very much" at the moment.
Precious metals and the dollar
Gold prices edged lower amid the risk-off moves and a firmer U.S. dollar. Market participants have voiced concern that climbing crude prices could feed into broad inflationary pressures, which in turn might prompt central banks to tighten policy. The prevailing market view at the time was that the Federal Reserve would hold rates at its June meeting, though traders continued to price in the possibility of a rate hike later in the year.
Non-yielding assets such as bullion typically struggle when real and nominal interest rates rise, and the dollar’s recent strength - partly attributed to demand during the Iran conflict as investors sought refuge in the greenback - can make gold more expensive for holders of other currencies. Some market participants have been buying the dollar on the view that the U.S., as a major energy exporter, could be less exposed to damage from the regional conflict.
Investors will continue to monitor the interplay between geopolitical developments, energy prices and central bank expectations, while keeping an eye on upcoming economic prints and corporate earnings that could influence near-term market direction.