Futures linked to Canada’s primary stock gauge opened with modest losses on Wednesday as investors parsed mixed geopolitical signals and fresh inflation data. At 09:01 ET (13:01 GMT), the S&P/TSX 60 index standard futures contract was down 5 points, or about 0.2%.
The Toronto Stock Exchange’s S&P/TSX composite index had risen in the previous session, ticking up 0.4% to close at 34,290.73 - its highest closing level since April 20 - but early trading in futures pointed to a cooler tone as markets weighed fresh developments.
U.S. futures and market mood
Across the border, U.S. stock futures hovered near the flatline on Wednesday after a mixed performance on Wall Street the day before. The main U.S. averages were uneven in the prior session, with market participants contending with two dominant themes: renewed tensions stemming from the U.S.-Iran standoff and a pullback in chipmaking-related shares following a recent run-up tied to renewed enthusiasm for artificial intelligence.
Investor attention was also drawn to inflation data showing that U.S. consumer prices rose at another brisk pace in April, following a steep gain in the prior month. That sequence of readings has reinforced a recurring market worry: that the Iran conflict, and the attendant closure of the Strait of Hormuz, is producing an energy shock that could push inflation higher and prompt central banks to raise interest rates further.
Reflecting those concerns, the amount of Federal Reserve rate increases priced in by the market for the period through next April rose, with that expected tightening hitting a new high of 20 basis points. Benchmark U.S. Treasury yields reacted in kind. The 10-year U.S. government bond yield climbed to its highest level since June 2025, while the rate-sensitive 2-year note also advanced. Because yields tend to move inversely to bond prices, their rise can make equities less attractive to some investors.
Producer price data was flagged as the next focal point for markets later in the day as participants sought additional clarity on inflation momentum.
Trump’s visit to China in focus
All eyes are shifting to China, where U.S. President Donald Trump is scheduled to meet Chinese leader Xi Jinping this week. The two presidents are expected to cover multiple topics, including trade and Taiwan, and Trump has indicated he will press Xi to "open up" China to U.S. businesses. Nvidia Chief Executive Jensen Huang was named among a group of corporate executives who will accompany the president on the trip.
Despite that agenda, many analysts expect the wider U.S.-Iran confrontation to dominate headlines. Some market commentators have suggested that China - as a major importer of Iranian crude - could be persuaded to act as a guarantor of a lasting agreement between Washington and Tehran. Other observers, however, have dampened expectations that the leaders' meeting will produce a breakthrough on that front.
Recent diplomatic momentum appears to have slowed. Earlier in the week, the president dismissed an Iranian reply to a U.S. peace proposal as "unacceptable" and described it as a "piece of garbage." Meanwhile, reports have circulated about whether the White House might resume strikes against Iran. Tehran has not signaled that it plans further conciliatory steps in response.
Energy and shipping - Strait of Hormuz remains a flashpoint
A critical immediate consequence of the stalemate is the effective closure of the Strait of Hormuz, a strategic waterway off Iran’s southern coast through which roughly a fifth of the world’s oil transits. The route has been effectively shuttered for weeks, adding to investor caution about the outlook for oil supplies and prices.
Analysts at Deutsche Bank noted heightened investor nervousness that a U.S.-Iran deal now looks further away than many had assumed when more positive reports circulated about a week earlier. That sentiment has helped keep oil prices well above the roughly $70 per barrel level that prevailed before the U.S. and Israel launched a joint assault on Iran in late February.
Commodities and the dollar
Inflation measures also influenced other asset classes. Data from the Labor Department showed U.S. producer price growth accelerated last month, adding to signs of an inflationary pull stemming in part from energy market disruptions. Earlier consumer price figures for the same period also registered brisk gains.
Against that backdrop, spot gold slipped as investors weighed the possibility that U.S. interest rates may remain higher for longer - an environment that typically weighs on non-yielding assets like bullion. The yellow metal was further pressured by a firmer U.S. dollar, with a dollar index tracking a basket of currencies near a one-week high. A stronger dollar tends to make gold more expensive for buyers using other currencies, reducing some demand.
Corporate results and technology supply chains
On the corporate calendar, networking equipment giant Cisco Systems is set to report results after the U.S. market close. Cisco’s release will usher in a wave of quarterly reports for companies with fiscal quarters ending in April. Earlier filings covering periods that ended in March were characterized as strong, providing some support for broader equity markets even as geopolitical risks and inflationary pressures persisted.
Investors will also recall that in February Cisco reported adjusted gross margin below expectations; that shortfall was attributed in part to a sharp increase in memory chip costs. That price spike was linked to a supply shortage driven by rapid build-out of artificial intelligence infrastructure, which in turn has pushed up input costs for some hardware vendors.
Separately, shares of several U.S.-listed internet and cloud companies moved on company-specific news. Alibaba’s U.S.-listed shares fell after the company reported a decline in fourth-quarter adjusted profit. Wix.com’s shares tumbled following lower-than-expected first-quarter adjusted earnings per share from the cloud-based website builder.
Federal Reserve leadership change on the horizon
On the policy front, the U.S. Senate was expected to vote on confirming Kevin Warsh as the next chair of the Federal Reserve as soon as Wednesday. Warsh is slated to replace Jerome Powell, whose term at the central bank is due to expire on Friday.
Earlier, the Senate approved Warsh’s nomination to the Fed’s Board of Governors by a 51-45 margin, granting him a 14-year term on the board. That confirmation vote exposed stark partisan divisions among senators, though Democrat John Fetterman of Pennsylvania crossed party lines to vote with Republicans in favor of Warsh’s appointment to the board.
Warsh was selected for the Fed’s top job by President Trump, who has repeatedly pressured policymakers to cut interest rates to stimulate economic activity.
What to watch next
- Producer price inflation readings due later in the day, which could further shape market expectations for Fed policy.
- Developments from President Trump’s China visit, especially any signals about trade, Taiwan, or China’s stance on Iranian crude purchases.
- Corporate earnings flow, beginning with Cisco’s results, for insights on supply-cost pressures and margins amid higher memory chip prices.
The combination of geopolitical risk, persistent inflation readings and evolving central bank expectations kept investors cautious in early trading, leaving TSX futures slightly lower despite recent record-close momentum on the domestic equity benchmark.