Futures linked to Canada’s main stock market moved modestly higher on Wednesday, supported by a rebound in oil and bullion prices as the conflict involving Iran entered a fifth consecutive day.
By 06:46 ET (11:46 GMT), S&P/TSX 60 index standard futures were up 11 points, or 0.5%. That followed a sharp decline on Tuesday, when the S&P/TSX composite index fell 2.2% to 33,784.94, marking the benchmark’s biggest single-session drop since February 12 and reversing a record high close the day before.
Tuesday’s pullback came amid investor concern about the economic and market implications of the fighting between Iran and joint U.S.-Israeli forces, and from a temporary slide in gold prices driven by dollar strength. Since then, bullion recovered some ground and oil pushed higher, giving the resource-heavy TSX futures some lift.
U.S. futures and intraday swings
Early U.S. stock index futures erased prior losses after reports suggested Iran might be seeking terms to end hostilities, a development that could reduce near-term geopolitical risk.
At 06:59 ET, Dow Jones Futures were mostly unchanged, S&P 500 Futures had gained 9 points, or 0.1%, and Nasdaq 100 Futures were higher by 54 points, or 0.2%.
Those gains came after a negative session on Wall Street, where all three major benchmarks recorded sizable losses as risk appetite weakened. Market participants were also trimming positions ahead of a slate of U.S. economic data later in the week.
Operational and regional developments
Ongoing military developments continued to shape market sentiment. U.S. Admiral Brad Cooper stated that Iran’s air defenses had been badly degraded, that its navy had no operational vessels on key waterways after 17 were sunk, and that more than 2,000 Iranian targets had been hit. Separately, Israel was reported to be striking the pro-Iran Hezbollah group in Lebanon after militants fired on Israel in retaliation for the death of Supreme Leader Ayatollah Ali Khamenei in the opening salvos on Saturday.
Iran has also launched missiles and drones at neighboring Arab states that host U.S. bases, widening the geographic scope of the conflict.
Despite that escalation, the New York Times reported that Iranian operatives had offered to discuss terms for ending the war, citing officials briefed on the outreach to the CIA. Markets responded to the mix of intensified military activity and reports of potential diplomacy.
Commodities: oil higher, gold bounces
Oil prices remained elevated despite some easing from the week’s initial spikes. Brent crude - which traded near $73 a barrel before the assault on Iran began - was last quoted at $82.41 a barrel, up 1.2%. U.S. West Texas Intermediate futures rose 0.2% to $74.68 a barrel.
For markets, a major concern is that sustained conflict could disrupt tanker traffic through the Strait of Hormuz, a vital conduit for global oil and gas shipments. Earlier in the week crude climbed sharply on expectations that supply disruptions might result from the hostilities.
Gold also regained some safe-haven demand after a steep loss on Tuesday. At 07:12 ET, spot gold was reported up 2.2% at $5,197.44 an ounce, and U.S. gold futures had risen 1.7% to $5,210.30/oz. The metal fell 4.5% on Tuesday, a drop attributed to a stronger U.S. dollar and rising Treasury yields in the prior session.
The dollar index had jumped nearly 1.5% over the previous two days, reaching six-week highs overnight as investors sought haven currency and scaled back expectations for near-term Federal Reserve rate cuts. The greenback showed a modest pullback after that surge.
Inflation and central bank considerations
Market participants remained focused on the inflationary risk the conflict poses. The article notes that a prolonged rally in oil could elevate global inflation, slow economic growth and prompt a more hawkish response from major central banks. Traders have pared back bets that the Federal Reserve will cut interest rates in the near term. CME FedWatch data referenced in the coverage indicated markets expect rates to remain largely unchanged until at least July.
Economic calendar and labor data
Investors awaited a series of U.S. labor and economic reports that could provide clarity on the strength of the jobs market and influence monetary policy expectations. The week’s schedule included the monthly ADP payrolls report and the Fed’s Beige Book, with Challenger job cuts data for February and weekly jobless claims due on Thursday. The key release for the week was the nonfarm payrolls report for February, expected on Friday, and viewed as the most consequential gauge of labor-market conditions for upcoming rate decisions.
Corporate earnings
On the corporate front, CrowdStrike reported fourth-quarter results that beat analysts’ estimates and issued guidance for fiscal 2027 that was largely in line with expectations. Company executives said enterprise adoption of AI was creating additional demand for security tools, positioning CrowdStrike to grow as firms work to protect AI workloads and associated data.
Additional quarterly reports were scheduled for Wednesday, including Abercrombie & Fitch (ANF), Broadcom (AVGO) and Okta (OKTA).
Outlook
With geopolitical tensions and incoming U.S. economic data dominating the near-term agenda, markets entered a cautious phase. Commodities provided some support to Canada’s futures, but investors remained attentive to developments that could affect energy supply, inflation and monetary policy timing. Corporate earnings that outperformed expectations offered selective positive cues, while the wider backdrop suggested ongoing volatility until greater clarity emerges on both geopolitical and macroeconomic fronts.