Futures linked to Canada’s principal equity gauge moved higher on Thursday after oil prices eased from a recent four-year peak and a sequence of earnings reports from the largest U.S. technology companies provided new detail on corporate spending plans.
By 07:49 ET (11:49 GMT), the S&P/TSX 60 index standard futures contract had risen by 10 points, or 0.5%.
The broader S&P/TSX composite index ended the prior session down 0.8% at 33,318.39, marking its lowest closing level since April 7. The benchmark has declined in five consecutive sessions, the longest run of declines since December 2024.
Policy and geopolitical clouds
Investor sentiment has been shadowed by a forecast from the Bank of Canada suggesting it could be compelled to raise interest rates if an energy shock tied to the Iran conflict materializes. The central bank, however, left its key overnight rate unchanged at 2.25% on Wednesday.
U.S. futures and mega-cap technology earnings
U.S. futures also traded higher. As of 07:32 ET, Dow futures were up 296 points, or 0.6%; S&P 500 futures were higher by 27 points, or 0.4%; and Nasdaq 100 futures had climbed 149 points, or 0.5%.
Following a mixed session for major U.S. averages on Wednesday, first-quarter results from the so-called Magnificent 7 gave investors a closer look at how the largest technology firms are allocating capital toward artificial intelligence initiatives.
Alphabet, the Google-parent, reported stronger-than-expected cloud revenue growth and traded higher in premarket activity. Amazon likewise rose after recording its strongest expansion in revenue at Amazon Web Services since 2022.
Microsoft’s cloud revenue was described as roughly in line with expectations, and the company guided for an acceleration in the second half of the year; nonetheless, Microsoft shares were lower ahead of U.S. market open.
Meta Platforms fell sharply, plunging by over 9% after the Instagram-owner increased its proposed capital expenditures for 2026 by $20 billion, raising its target range to $125 billion to $145 billion.
Together, the four large tech firms referenced in the recent reporting cycle spent a record $130.65 billion in the first quarter, primarily on data-center buildout to support AI workloads. That aggregate capital outlay was 71% higher than what those companies spent in the same quarter a year earlier.
Commenting on the trend, Kate Leaman, Chief Market Analyst at AvaTrade, said: "What investors are really watching is the AI spending race, and last night confirmed it is accelerating, not slowing. Collectively, these companies are committing hundreds of billions to AI infrastructure - and while the early returns look promising, the cash cost is starting to show. The question the market is asking is no longer 'are they investing enough?' but 'when does it pay off?'"
Oil volatility eases after intraday spike
As market participants parsed corporate results, oil prices initially jumped on a news report before later retreating. Axios reported that President Donald Trump will receive a briefing on the possibility of carrying out another military strike on Iran later in the day; the reported aim is to pressure Tehran back to the negotiating table after talks stalled.
On social media, the former president posted: "Iran cant get their act together. They dont know how to sign a nonnuclear deal. They better get smart soon!"
By 08:40 ET, Brent crude futures - the global benchmark - had declined 3.4% to $114.09 a barrel, after earlier touching an intraday peak above $126 a barrel. The June contract for delivery was noted as due to expire on Thursday.
Despite the pullback, Brent remains substantially higher than pre-war levels cited in market commentary at around $70 a barrel, keeping alive worries that an energy-driven surge in prices could reignite inflationary pressures and potentially prompt central banks to raise interest rates.
Gold gains as dollar eases
Gold prices climbed as the dollar eased, reversing some of bullions losses from April that had been tied to concerns about an energy shock lifting inflation and keeping rates elevated for longer.
At 06:42 ET, spot gold was up 2.1% at $4,639.40 an ounce, though it remained down roughly 0.9% so far for the month. Gold futures for June delivery rose 2.0% to $4,651.49 an ounce.
Analysts at ING observed that market focus remains on diplomatic developments and U.S. enforcement activity around Iranian ports, underscoring the link between geopolitical events and safe-haven demand.
Federal Reserve decision and Fed leadership
The Federal Reserve left its policy rate unchanged at a target range of 3.5% to 3.75% on Wednesday, in a decision described in the reporting as the most contentious since the early 1990s. The Fed also chose not to alter the language in its policy statement, which currently implies that the next move for rates is likely to be down rather than up.
Four of the 12 members of the rate-setting Federal Open Market Committee dissented from the statement.
Fed Chair Jerome Powell announced he would remain on the Federal Reserve Board after his chairmanship concludes in May - a departure from past practice that could affect the transition to Kevin Warsh, the president's nominee to succeed him as chair.
Powell said he was concerned about "the series of legal attacks on the Fed," adding that these "threaten our ability to conduct monetary policy without considering political factors." The Justice Department had suspended a criminal investigation into Powells handling of renovations to the Feds headquarters the prior week; Powell said the legal dispute left him with "no choice" but to stay on the board.
Market takeaways
Markets opened the day navigating a mix of risk drivers: corporate spending trends at major technology firms that highlight accelerating investment into AI infrastructure; persistent geopolitical uncertainty that affects energy prices and safe-haven assets; and central bank signals that continue to weigh on interest-rate expectations. Canadian equity futures moved modestly higher as oil cooled from its spike and as investors digested the implications of hefty capital expenditures at the largest tech companies.
The path for equities and interest-rate sensitive sectors will likely depend on the evolution of oil prices and any further clarity on central bank guidance in response to possible energy-driven inflationary pressures.
Key data points referenced in this report
- S&P/TSX composite index prior close: 33,318.39 (-0.8%)
- Bank of Canada policy rate: 2.25%
- Dow futures: +296 points (+0.6%) as of 07:32 ET
- S&P 500 futures: +27 points (+0.4%) as of 07:32 ET
- Nasdaq 100 futures: +149 points (+0.5%) as of 07:32 ET
- Aggregate capex by four major tech firms in Q1: $130.65 billion (up 71% year-over-year)
- Brent crude: $114.09 a barrel (-3.4%) as of 08:40 ET, after an intraday high above $126
- Spot gold: $4,639.40 an ounce (+2.1%) as of 06:42 ET; June gold futures: $4,651.49 an ounce (+2.0%)
- Fed funds target range: 3.5% to 3.75%; FOMC dissenters: 4 of 12