Market open in Canada
Futures associated with Canada’s leading stock index were slightly higher on Tuesday as investors weighed new developments in the Middle East alongside a calendar full of earnings reports and central bank events. By 08:31 ET (12:31 GMT), the S&P/TSX 60 index standard futures contract had climbed 2 points, or about 0.1%.
The primary S&P/TSX composite index gained 0.6% to finish Tuesday at 35,568.14, surpassing a record closing level reached last week. The upward push was aided in part by strength among technology-related names.
Several Canadian companies are scheduled to report results this week, with Agnico Eagle Mines, Magna International and Enbridge Inc. among those on the docket.
U.S. futures and recent session moves
U.S. futures were mixed as concerns tied to artificial intelligence and its implications for chipmakers weighed on sentiment ahead of major technology earnings and the Federal Reserve’s policy meeting. At 08:40 ET, benchmark S&P 500 futures were up 0.1% and Dow futures had climbed 0.9%, while Nasdaq 100 futures were down 0.8%.
In Monday’s regular session, the Dow Jones Industrial Average rose 0.5%, the S&P 500 ended largely unchanged and the NASDAQ Composite slipped 0.2%. The Nasdaq’s weakness was in part the result of a selloff in semiconductor stocks following reports pointing to rapid advances by Chinese memory chipmakers.
Asian markets and semiconductor concerns
Asian equity markets tumbled on Tuesday, with South Korea’s KOSPI plunging more than 10%. Shares of Seoul-listed Samsung Electronics (KS:005930) and SK Hynix (KS:000660) each closed nearly 14% lower. Investors were parsing signs that Chinese competition in semiconductors may be intensifying - including the notable market debut of memory chipmaker CXMT and reported progress in domestic production of immersion deep ultraviolet lithography machines.
Nvidia and AI-related investor focus
Nvidia (NASDAQ:NVDA) traded slightly lower in premarket activity after slipping by about 5% on Monday. That drop followed media reports that the AI chipmaker could provide a roughly $250 billion financial guarantee to backstop a large OpenAI data center project, prompting questions about the sustainability of heavy AI infrastructure spending.
Investors are closely watching upcoming quarterly reports from Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META), Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN). These results are expected to offer fresh insight into whether substantial investments in AI infrastructure are beginning to translate into earnings growth.
Earlier in the week, electric-vehicle maker Tesla (NASDAQ:TSLA) and Google-parent Alphabet (NASDAQ:GOOGL) flagged elevated AI-related spending plans, which has been a focus for market participants tracking the profitability impact of AI investments.
Federal Reserve meeting and policy outlook
The Federal Reserve commenced a two-day policy meeting on Tuesday, with its interest rate decision scheduled for release the following day. Market participants indicated they will be watching remarks from Chair Kevin Warsh for clues about the policy trajectory, although Warsh has signaled he is unlikely to provide detailed forward guidance on the path of rates.
Overall, markets broadly expect the Fed to hold borrowing costs steady at this meeting. Yet traders have been upping the odds that policymakers could resume tightening later in the year. Markets were pricing roughly a 38% chance of a rate hike this week and about an 80% probability of an increase in September, according to CME FedWatch.
Oil, geopolitics and political comments
Oil prices extended sharp losses on Tuesday after the U.S. and Iran maintained a pause in hostilities over the weekend. President Donald Trump said the United States was holding "good talks" with Iran and that there was a chance of reaching an agreement to end months of conflict, while also warning that U.S. military strikes would resume if diplomacy failed.
"I think there’s a good chance that something could happen, and if it does, good, if it doesn’t, we go back to doing what we were doing two days ago," Trump said.
Corporate news and settlements
Among individual company developments, Johnson & Johnson (NYSE:JNJ) will draw attention after the pharmaceutical group announced a proposed $5.5 billion settlement intended to resolve the bulk of its remaining ovarian talc litigation.
Gold and the dollar
Precious metals softened on Tuesday. By 08:52 ET, spot gold had fallen about 1.0% to $4,034.50 an ounce, while gold futures retreated about 1.1% to $4,033.45 an ounce. The U.S. dollar index was mostly unchanged but remained near a one-month high, a stronger dollar that can weigh on bullion’s appeal to overseas buyers.
Analysts noted that gold appears confined to a wide trading range as investors await clearer signals from the Fed. Higher interest rates generally dampen demand for non-yielding assets such as gold.
What to watch next
Market participants will monitor this week’s slate of corporate earnings from both Canadian and U.S. companies and the outcome of the Fed’s meeting for further guidance on the economic and monetary outlook. Geopolitical developments and unfolding competition in the semiconductor sector are likely to remain focal points for investors weighing sector-level risks and opportunities.