Futures linked to Canada’s principal equity index were modestly firmer on Tuesday as investors returned from a Victoria Day holiday and contended with lingering inflation worries and fresh uncertainty tied to the Iran conflict.
By 08:15 ET (12:15 GMT), the S&P/TSX 60 index standard futures contract was up 9 points, or 0.5%.
The Toronto Stock Exchange’s S&P/TSX composite index was closed on Monday for Victoria Day. In the prior trading session on Friday, the index fell to its lowest closing level since May 5.
Market participants have noted that the Bank of Canada has signaled it is prepared to raise interest rates if higher oil prices begin to feed through into broader inflation. Fresh consumer price data showed that prices rose at a faster pace in the 12 months to April, driven largely by soaring gasoline costs. That reading, however, was softer than some had expected due to declines in certain categories, including accommodation and furniture.
Canada’s five-year government bond yield - an influential driver of mortgage costs - was last trading lower at 3.338% after having moved higher in the previous week.
U.S. futures, corporate reports and sector moves
Across the border, U.S. stock index futures pointed lower. Traders were balancing continuing coverage of the Iran conflict with preparations for key corporate earnings later in the week, most notably results from Nvidia, the leading chipmaker for artificial intelligence applications, which could provide fresh insight into momentum in the technology theme.
Shares of Nvidia slipped before the opening bell, and other names tied to memory chips and data storage, such as Micron and Western Digital, also moved lower.
On Monday, U.S. major averages closed mixed. The tech-heavy Nasdaq Composite and the benchmark S&P 500 ended the session in negative territory, while the Dow Jones Industrial Average outperformed, advancing by 0.3%.
Investors attributed some of the technology weakness to profit-taking, alongside pressure from a rise in U.S. Treasury yields and still-elevated oil prices. The sell-off in government debt has since shown signs of stabilizing.
Oil and Iran developments
Crude oil prices eased on Tuesday but remained substantially higher than levels before the conflict. Brent crude, the international benchmark, was down about 1.6% at $110.33 a barrel, while U.S. West Texas Intermediate futures slipped 0.9% to $103.45 a barrel.
State media in Iran reported that Tehran has submitted a peace proposal to the United States that would halt hostilities on all fronts of the conflict, including in Lebanon, and seek reparations for damage caused by the fighting. The plan, according to the IRNA news agency, also requests that U.S. forces leave areas close to Iran, calls for the removal of sanctions, the unfreezing of funds, and an end to what it described as an American blockade of Iranian ports.
Reuters, citing a Pakistani source, reported that Islamabad had shared Iran’s proposal with Washington. Pakistan has frequently acted as an intermediary between the two sides since the conflict began in late February. Reuters also noted that Iran’s latest offer did not appear materially different from earlier terms that U.S. President Donald Trump last week described as "garbage."
Separately, on Monday the president said he had called off carrying out fresh attacks on Iran following requests from three Gulf leaders. He posted that "serious negotiations are now taking place," adding that, in the opinion of the Gulf authorities, "a Deal will be made, which will be very acceptable to the United States of America, as well as all Countries in the Middle East, and beyond." He also stated that the agreement would include "NO NUCLEAR WEAPONS FOR IRAN!" while noting he had ordered the U.S. military to remain prepared to conduct a "full, large scale assault on Iran, on a moment’s notice" should talks fail.
Precious metals and the dollar
Gold prices fell, pressured by lingering inflation concerns and a relatively firm U.S. dollar. The dollar’s standing as a safe-haven currency has been reinforced in recent weeks amid the view that the U.S. economy - as a substantial energy producer - might be insulated from an oil-price shock related to the Iran conflict. A measure of the greenback against a basket of currencies was trading marginally higher.
A stronger dollar typically makes gold more expensive for international buyers, removing some support for bullion. There are also concerns that an energy price shock tied to Iran could boost inflation and prompt central banks to raise interest rates - an environment in which non-yielding assets such as gold tend to underperform.
What traders are watching next
Market attention will remain split between geopolitical developments in the Middle East, commodity price movements - particularly oil and gasoline - and forthcoming corporate results that could clarify demand trends in technology and semiconductor markets. In Canada, yields and housing-sensitive spreads will likely stay in focus given central bank commentary linking oil-driven inflation to potential policy action.