Market snapshot
Canada’s main equity gauge eased from its fresh peak on Thursday as investors digested geopolitical signals from the Middle East and renewed concern about the artificial intelligence trade. The S&P/TSX Composite was down 0.2% at 09:32 a.m. ET, retreating after a rally the prior session that had produced a new record.
Wednesday’s advance was supported by pronounced gains among metal miners, which benefited from a rally in gold prices, and by an upbeat outlook from Shopify that helped buoy sentiment earlier in the week.
U.S. markets - mixed start
Across the border, U.S. stocks opened mixed, extending a pattern seen after a strong start to August. At 09:31 a.m. ET (13:31 GMT), the S&P 500 was up marginally at 7,724.51 points, the Dow Jones Industrial Average had added 0.1% to 54,426.85 points, and the Nasdaq Composite slipped 0.4% to 26,265.58 points.
Technology shares came under pressure early in the session after sharp declines in major memory-chip suppliers. SanDisk fell by more than 13% at the open, while Western Digital plunged about 19% amid investor disappointment over their latest earnings versus lofty expectations tied to AI infrastructure spending.
Geopolitical developments in focus
Beyond earnings, traders were closely following any updates on a potential agreement to reopen shipping through the Strait of Hormuz. U.S. officials had indicated earlier in the week that an agreement looked imminent, and U.S. political leaders said talks with Iran were progressing, though they offered few specifics.
Iran’s officials signaled a deal with Oman on issues related to the strait appeared close and cautioned the United States against further strikes on Iranian territory. Tehran said it was communicating with mediators in Oman rather than engaging in direct talks with the U.S., and warned that a deal with Oman would not automatically guarantee security in the waterway.
Expectations that passage could be restored have contributed to sharp declines in oil prices this week, easing some inflation worries and concerns about more aggressive Federal Reserve rate hikes. That drop in oil also helped push government bond yields lower over the past week.
Markets remained wary of abrupt shifts in tone, given the repeated cycles of threats, attacks and concessions between the U.S. and Iran since the start of their conflict in late-February.
Gold steadies near multi-week highs
Gold held near a seven-week high amid the geopolitical backdrop. Spot gold rose 0.2% to $4,255.92 an ounce, while gold futures ticked up 0.2% to $4,315.05 an ounce. Analysts at ING noted that while geopolitical risk premiums may continue to fade, lower oil prices, a softer dollar and the prospect of a more dovish-than-expected interest-rate environment should remain supportive for bullion.
A relatively subdued U.S. dollar further supported gold by making the metal cheaper for buyers using other currencies.
Looking ahead
Investors are also preparing for key U.S. labor-market data due on Friday. On Wednesday, a private-sector report showed that hiring slowed in July, and attention has turned to the closely watched nonfarm payrolls release that could offer additional clues about the Federal Reserve’s policy path.
For now, markets are balancing hopes for a de-escalation in the Gulf - a development that has eased oil and inflation pressures - against fresh unease in the technology sector tied to earnings and the potential recalibration of expectations for AI-related demand.
Sectors affected
- Energy - oil prices have fallen sharply this week as hopes of reopening the Strait of Hormuz reduced near-term supply disruption fears.
- Precious metals - gold climbed toward a seven-week peak as lower oil, a softer dollar and calmer inflation expectations supported bullion.
- Technology - chipmakers and AI-exposed suppliers came under pressure after earnings failed to meet high expectations.
- Financial markets - government bond yields declined over the past week amid the softer oil price backdrop.
Note - All market moves and price levels referenced are those reported at the times noted above.