Futures tied to the S&P/TSX 60 opened the trading day marginally higher on Thursday as market participants positioned for the release of key U.S. employment data that could influence the Federal Reserve's policy calculus.
By 07:13 ET (11:13 GMT), the standard S&P/TSX 60 futures contract was up roughly 3 points, or about 0.1%. Canadian markets were closed on Wednesday for the Canada Day holiday, leaving traders to absorb overnight developments and incoming U.S. macroeconomic indicators.
Analysts were focusing on the U.S. payrolls print due at 08:30 ET. Consensus expectations call for the addition of 114,000 jobs in June, a deceleration from the 172,000 jobs reported for May, while the unemployment rate is projected to hold at 4.3%, the level it has reported since March. Nonfarm payrolls have run above expectations in recent months, lifting the three-month average to roughly 188,000 - its highest two-year reading - and reinforcing the perception of a still-resilient labor market.
Economists and investors alike recognize that persistent strength in hiring could give policymakers at the Fed more latitude to consider additional tightening this year, particularly as concerns about energy-driven inflation remain in play. Oil prices, which rose sharply in late February after the start of a U.S.-Israeli operation against Iran, have moderated somewhat after a framework agreement was signed last month between the U.S. and Iran, but uncertainty endures over whether the earlier spike will translate into prolonged inflationary pressure.
Oil market reaction
Brent crude futures, the global benchmark, fell 2.0% to $70.16 a barrel as of 07:35 ET, while U.S. West Texas Intermediate (WTI) crude futures slid 2.2% to $67.07 a barrel. Traders were weighing the results of mediated talks between U.S. and Iranian representatives held in Doha. Those indirect discussions ran for two days and concluded without a definitive breakthrough toward a lasting agreement, though Qatar characterized the exchanges as making constructive progress and confirmed that further negotiations would continue.
The Doha discussions concentrated on maritime security through the Strait of Hormuz and other confidence-building measures. Although tensions have eased from recent peaks, market participants remain attentive to any disruption of crude flows through the strait, which could pose a risk to global energy supplies.
Gold and the dollar
Spot gold moved higher as well, advancing roughly 1.0% to $4,071.45 an ounce. The metal’s near-term direction is sensitive to expectations for Fed policy because shifts in interest-rate expectations can alter the opportunity cost of holding a non-yielding asset like gold.
At the same time, the U.S. dollar index weakened modestly. Despite that dip, the dollar remains elevated relative to levels seen before the recent geopolitical tensions. A stronger dollar tends to make bullion more costly for overseas buyers and can weigh on gold prices, while a softer dollar can provide support.
U.S. futures and equity movers
U.S. stock futures were mixed in the lead-up to the payrolls report. By 07:26 ET, Dow futures had gained about 97 points, or 0.2%; S&P 500 futures were largely flat; and Nasdaq 100 futures had slipped roughly 84 points, or 0.3%.
Market sentiment had received some reassurance on Wednesday after comments from Fed Chair Kevin Warsh, who indicated that inflation risks have eased. Warsh reiterated that he would not provide forward guidance on rates and emphasized his commitment to price stability. Traders reacted by significantly de-emphasizing the likelihood of a Fed rate increase in July, with softer-than-expected U.S. private payrolls and manufacturing activity readings adding to that dovish repricing, according to analysts at Deutsche Bank.
Despite the calmer tone on policy risks, the main U.S. indices still retreated as chipmaking stocks endured fresh selling following a report that Meta Platforms is potentially marketing its excess computing capacity to outside firms. Analysts at Vital Knowledge noted that the move could signal that large-scale tech companies are attempting to monetize their rapid build-outs of artificial intelligence infrastructure while trimming heavy capital spending. They warned that such a shift might trigger a pronounced rotation away from AI-focused chip and component names in the coming days and weeks.
The chip-stock selloff extended into Thursday premarket trading. Shares of Micron and Western Digital were lower, and declines were also seen in Coherent, Marvell Technology, AMD, Intel, and Microchip Technology. Meanwhile, Meta Platforms was cited in market data as trading higher in reaction to the capacity-selling report.
What to watch
- U.S. nonfarm payrolls and the unemployment rate data at 08:30 ET, which could influence near-term Fed policy bets.
- Developments from continued U.S.-Iran diplomatic exchanges, especially any implications for crude flows through the Strait of Hormuz.
- Price action in key sectors: energy (oil benchmarks), precious metals (gold), and technology/chips, where recent headlines have driven notable volatility.