Futures connected to Canada’s main stock index gained ground on Wednesday amid rising optimism that negotiations between the U.S. and Iran could be nearing a resolution to the conflict that began in late February.
By 08:38 ET (12:38 GMT), the S&P/TSX 60 index standard futures contract had risen by 20 points, or 1%. That came after the broader S&P/TSX composite index closed Tuesday down 0.2% at 33,566.91, marking a third straight session of declines. The ongoing weakness was partly attributed to a drop in shares of Canadian e-commerce firm Shopify, which recorded a sharp fall after issuing a tepid forecast despite noting benefits from its artificial intelligence initiatives, weighing on the technology cohort.
Market backdrop
U.S. equity futures also extended gains on Wednesday as fresh signs emerged that Washington and Tehran may be edging toward a deal to halt the Middle East hostilities. President Donald Trump said the Strait of Hormuz would be "OPEN TO ALL" if Iran accedes to U.S. demands, reflecting rising hopes that a settlement could be within reach.
In a social media post, Mr. Trump asserted that the U.S. assault on Iran, which Washington began with Israel in late February, "will be at an end" if Tehran "agrees to give what has been agreed to." He did not provide additional detail about those promises, but warned that U.S. bombardments could resume "at a much higher level and intensity than it was before" should a negotiated accord collapse. Mr. Trump also described "great progress" as having been made in discussions, while telling the New York Post that it was "too soon" to think about potential in-person talks with Iran.
An Axios report cited White House thinking that negotiators are close to agreeing on a one-page memorandum of understanding intended to bring the war to a close and to serve as a framework for more detailed nuclear negotiations. The report said Washington expects Tehran to reply on several major points within the next 48 hours. Axios added that while nothing has yet been finalized, this represented the closest the parties have come to an end to the conflict since the fighting began.
According to the outline provided in reporting, a potential understanding would include a moratorium by Iran on nuclear enrichment in exchange for the U.S. removing sanctions and releasing billions of dollars of currently frozen Iranian assets. The agreement would also lift restrictions on transit through the Strait of Hormuz, restoring movement through the strategic waterway, the report said.
Responses to the U.S. proposal have been described as measured. An Iranian foreign ministry spokesperson told CNBC that Tehran was "evaluating" the offer, while Pakistan, which has been acting as a mediator between Washington and Tehran, confirmed to Reuters that both sides were closing in on an agreement. Iran’s foreign minister, Abbas Araghchi, speaking after a meeting with China’s top diplomat, said: "We will do our best to protect our legitimate rights and interests in the negotiations." He emphasized Tehran’s insistence on a "fair and comprehensive agreement."
Reports noted Beijing’s prominence as a purchaser of Iranian oil and suggested China might be urging Tehran not to escalate tensions ahead of an upcoming meeting between Chinese leader Xi Jinping and President Trump.
Energy, gold and broader market reactions
Oil prices eased on Wednesday, with Brent crude futures last orbiting around $100 a barrel, still well above pre-war levels near $70 a barrel. The retreat in crude prices pressured U.S. energy stocks, and names including Exxon Mobil, Chevron and ConocoPhillips declined.
Earlier developments in the Strait of Hormuz contributed to the background of market uncertainty. Iran’s paramilitary Revolutionary Guards Navy reportedly indicated that safe and stable transit of the strait would be possible, a comment Reuters attributed to Iranian state media as citing the end of what the Guards described as "threats from aggressors." President Trump announced on Tuesday that "Project Freedom" - the U.S. operation to reopen the Strait of Hormuz via military escort of commercial shipping - would be paused "for a short period of time." The initiative, which had been launched earlier in the week, was followed by renewed attacks in the strait and the Gulf region, including strikes in the United Arab Emirates, prompting a reported change at the request of Pakistan and other countries.
Despite those statements, the Strait of Hormuz remained effectively closed to tanker traffic, with both the U.S. and Iran having established blockades. Disruptions to shipping through the chokepoint - which carries about a fifth of the world’s oil - have been a contributing factor in concerns about an energy shock that could push inflation higher and slow global growth.
Precautionary positioning helped send gold prices higher on Wednesday. Market participants interpreted progress in diplomatic talks as reducing the immediate probability of an energy-driven inflation shock that might prompt central banks to raise interest rates further - a dynamic that has made non-yielding assets such as gold less attractive in recent weeks. At the same time, the U.S. dollar softened, improving bullion’s appeal to overseas buyers; the greenback had been used as a relative safe-haven during the Iran conflict, with some traders viewing the American economy - also an oil producer - as potentially insulated from energy supply shocks.
Corporate earnings and sector notes
Beyond geopolitics, corporate results were shaping market action. Advanced Micro Devices jumped in premarket trading after the chipmaker reported stronger-than-expected results driven by its data center business, lifting quarterly profit and revenue above consensus.
AMD reported first-quarter net income of $1.38 billion, up from $709 million a year earlier. Adjusted earnings per share came in at $1.37 versus Wall Street estimates of $1.28. Revenue rose 38% to $10.25 billion, led by a 57% increase in data center sales amid demand for EPYC processors and expanded shipments of its Instinct GPUs. CEO Lisa Su said server growth is expected to "accelerate meaningfully" as AMD expands supply to meet high demand.
Analysts remain focused on competitive positioning within the AI and server markets. Strategists at BofA Securities noted that while they are "big believers in AMD’s execution," the company remains exposed to uncertain share allocation among rivals supplying the startup behind the widely used AI model, which could influence future growth dynamics.
Other corporate moves included Walt Disney shares surging in premarket trading after the entertainment company’s fiscal second-quarter revenue topped estimates in its first results under CEO Josh D’Amaro. CVS Health also gained after raising its annual adjusted profit outlook, attributing the upgrade to strong execution "across our enterprise."
What to watch
Investors will be watching closely for firm confirmations from both Washington and Tehran on the reported memorandum of understanding and for any public timelines tied to a final agreement. Market participants will also track oil and gold price moves, as well as incoming corporate earnings, for further signals about how quickly sentiment could normalise and what that may mean for sector rotations between energy, materials and technology stocks.
Given the interconnection between shipping through the Strait of Hormuz, oil flows, and inflation expectations, developments in negotiations - or a reversal of progress - are likely to exert outsized influence on energy producers and commodity-linked sectors. At the same time, chipmakers and other technology firms remain sensitive to demand dynamics in AI data centers and supply allocation among vendors.