Market snapshot
Futures on Canada’s principal stock index turned lower on Friday as investors continued to price in the economic and market consequences of the ongoing conflict centered on Iran. By 06:50 ET (11:50 GMT), the S&P/TSX 60 index standard futures contract had eased by 9 points, a decline of 0.5%.
The broader S&P/TSX composite index fell 1% to 33,609.97 on Thursday, marking its lowest closing level since February 19. Two of the exchange’s most influential sectors - materials and financials - registered notable weakness. The materials group, which carries significant weight in the commodity-oriented Canadian market and includes metal-mining stocks, sank 3.9% as investors reacted to shifts in commodity prices and broader risk sentiment. Financial equities, another large component of the index, also pulled back.
Drivers: oil, yields and the dollar
Movements in global energy markets have played a central role in recent market behavior. An upturn in U.S. Treasury yields and a stronger U.S. dollar - both influenced in part by higher oil prices linked to the fighting in the Middle East - exerted downward pressure on gold and fed through to risk assets in Canada and the United States.
U.S. crude futures have surged sharply since the conflict escalated, with the surge in energy costs adding to inflation concerns. The spike in oil has increased worries about supply disruptions through key maritime chokepoints and has reverberated across commodity-linked equities.
U.S. futures and equity performance
Equity futures in the United States were also lower on Friday, extending recent declines as tensions in the Middle East intensified and oil climbed ahead of a significant monthly U.S. labor-market report.
At 05:35 ET, Dow Jones futures were trading 234 points, or 0.5%, lower. S&P 500 futures had slipped 43 points, or 0.6%, and Nasdaq 100 futures were down 198 points, or 0.8%.
In the prior session, the main benchmarks on Wall Street fell amid concern that climbing oil prices could choke off supplies via the narrow Strait of Hormuz, located south of Iran. The Dow Jones Industrial Average dropped nearly 785 points, or 1.6%, positioning the index for a second consecutive weekly decline and its worst week since last October. The S&P 500 decreased about 0.6%, while the NASDAQ Composite was down nearly 0.3%.
Sentiment and energy price dynamics
Investor sentiment has been significantly affected this week by the widening regional conflict. U.S. crude futures have spiked by almost 21% since the fighting spread to additional parts of the Middle East and the Persian Gulf. The military actions have included joint strikes by the U.S. and Israel against Iran, moves that market participants view as heightening the chance of disruptions to oil flows out of a major producing region.
The rise in oil has also exacerbated inflationary pressures. Average gasoline prices in the United States rose by 27 cents to $3.25 per gallon following the start of the assault, according to Reuters, which cited data from travel group AAA. Higher energy costs typically squeeze corporate margins and consumer spending power, and they complicate the Federal Reserve’s task of bringing inflation down.
Statements from political and military leaders have underlined the conflict’s escalation. U.S. Secretary of Defense Pete Hegseth said late Thursday that "the amount of firepower over Iran and over Tehran is about to surge dramatically." Israeli authorities said on Friday they had begun a "broad-scale" wave of attacks against infrastructure targets in Tehran. Separately, U.S. President Donald Trump told Reuters in a telephone interview that the United States must have a role in deciding who will be the next leader of Iran after airstrikes killed Supreme Leader Ayatollah Ali Khamenei last week, suggesting prolonged U.S. involvement in events there.
Crude prices and supply measures
Oil markets pushed higher on Friday, with both major benchmarks trading well above levels seen prior to the recent surge and set for substantial weekly gains. Brent futures climbed 4.7% to $89.38 a barrel, while U.S. West Texas Intermediate crude futures rose 6.3% to $86.11 a barrel. Over the four trading sessions since the war began, Brent has gained 18% and WTI has risen 21%.
To alleviate some supply concerns, the U.S. announced a temporary measure to allow the sale of Russian oil to India for 30 days. Market participants, however, remained focused on the potential closure of the Strait of Hormuz, a narrow waterway between Iran and Oman through which roughly 20% of the world’s oil supply passes, and the associated risk of significantly tighter global flows.
Precious metals and yields
Gold gained modestly in intraday trading but was poised to record a weekly decline as a stronger dollar and rising Treasury yields outweighed demand for safe-haven assets. At 04:35 ET (09:35 GMT), spot gold traded 0.2% higher at $5,090.70 an ounce, and gold futures were up 0.4% at $5,098.49/oz. Despite the uptick, gold was on track to fall more than 3% over the week amid reduced expectations for near-term interest-rate cuts.
Economic calendar and labor-market focus
Attention in markets is turning to February’s U.S. nonfarm payrolls report, due later in the session. Economists expect the U.S. economy to have added about 58,000 jobs in February, following a stronger-than-expected reading in the prior month, while the unemployment rate is projected to hold close to 4.3%.
Investors and policymakers view the payrolls report as central to forming expectations about the timing and scope of Federal Reserve rate cuts this year. A resilient labor market could give the Fed room to keep policy rates higher for longer, while softer-than-expected payrolls may increase the likelihood of easing. Traders at present still see rate easing later in the year, but recent economic strength and the geopolitical shock have tempered expectations for large or immediate cuts.
Corporate news
On the corporate front, semiconductor designer Marvell Technology lifted its full-year revenue outlook, citing robust ongoing spending in data centers by AI hyperscalers. Companies such as Amazon and Microsoft have made AI a central business focus and are expected to invest heavily in data-center capacity and infrastructure to support and train AI systems. Firms like Marvell, which develop interconnect and networking components that shuttle data between large-scale computing systems, have benefited from that spending.
Retailers reported mixed updates. Clothing chain Gap issued fiscal 2026 guidance that disappointed investors, with the company pointing to tariff-related headwinds. Costco Wholesale Corp posted higher revenue and profit for the second quarter, with membership fees totaling $1.36 billion, a 13.6% increase year over year.
Implications for investors
In the near term, market moves show heightened sensitivity to geopolitical developments that affect energy supply and global risk sentiment. Commodities-exposed equities and sectors with large cyclical exposures have been most directly affected, while safe-haven assets and interest-rate expectations are also shifting in response to evolving oil prices and the conflict’s trajectory.
With a major U.S. labor-market release imminent, market participants are balancing geopolitically driven risk with incoming economic data that will influence the outlook for monetary policy.