Futures tied to Canada’s principal equity benchmark edged lower on Thursday as traders monitored sustained frictions in the Middle East alongside a packed corporate earnings calendar.
By 08:05 ET (12:05 GMT), the S&P/TSX 60 index standard futures contract had fallen by 3 points, or 0.2%. The broader S&P/TSX composite index had finished the previous session up 0.4% at 33,955.11, recovering somewhat after enduring its steepest one-day drop in a month in the session prior.
U.S. equity futures were also under pressure. By 06:42 ET (10:42 GMT) the Dow futures contract was down 351 points, or 0.7%, S&P 500 futures had slipped 35 points, or 0.5%, and Nasdaq 100 futures were lower by 126 points, or 0.5%.
Equity benchmarks on Wall Street had climbed in the prior trading session, moving toward fresh record highs. That advance reflected, in part, investor relief after an apparent extension of a ceasefire between the U.S. and Iran shortly before the original truce was due to expire, and it was reinforced by company results that so far have shown resilience even as wartime headwinds persist.
Despite the temporary de-escalation, uncertainty about the durability of the ceasefire and the prospects for broader peace talks remained. Anxiety around the Strait of Hormuz continued, even after President Donald Trump said in a social media post that a two-week ceasefire deal with Iran had been extended just hours before it was scheduled to lapse. He said the extension came at the request of Pakistan, which has acted as a mediator between Washington and Tehran, and that the truce would remain in effect "until such time as" Iranian officials present a "unified proposal" for peace. Leaders from both sides, however, have indicated they remain prepared to resume hostilities.
Hostilities at sea added to market apprehension. Tehran attacked three ships in the strait, seizing two of them, and Iranian officials said the move was a response to an American blockade of Iranian ports and to a recent seizure of an Iranian-flagged vessel.
Efforts to keep talks alive were reported to be underway. Mediators from Pakistan, Turkey and Egypt were said to be racing to salvage peace talks between the U.S. and Iran, including arranging a potential meeting as soon as Friday, according to a Wall Street Journal report that cited officials familiar with the matter. The U.S. and Iran were exchanging messages via third parties, although the report said little progress had been made.
Energy and commodity markets
Signs that disruptions to oil flows through the Strait of Hormuz could persist sent crude prices back above the $100-per-barrel level. Brent crude futures, the global benchmark, were last higher by 0.2% at $102.03 a barrel, while U.S. West Texas Intermediate crude futures were up 0.1% at $93.06 a barrel.
Although crude has eased from the initial spike seen after the outbreak of the conflict in late February, prices remain well above levels that prevailed before the hostilities began. Market participants are weighing the risk that an energy shock could lift inflation and slow global growth.
Gold gave back some earlier losses and traded largely flat after coming off intraday declines. Bullion remained pressured by a firmer U.S. dollar and renewed concerns that higher energy prices could accelerate inflationary pressures. In an environment where rate expectations have firmed, non-yielding assets such as gold typically struggle to gain traction.
Spot gold was down 0.2% at $4,731.72 an ounce, while gold futures dropped 0.1% to $4,748.49 per ounce by 08:28 ET.
Earnings season and corporate news
Corporate America has delivered a broadly solid start to first-quarter earnings season despite geopolitical headwinds. Data compiled by Bloomberg showed that nearly 80% of S&P 500 companies reporting first-quarter results had beaten analysts' estimates.
Tesla reported a quarter that beat on both revenue and profit, with its core automotive operations performing better than feared. The company, however, saw its shares reverse course in aftermarket trade after outlining plans to spend in excess of $25 billion this year to fund an expanded push into robotics and autonomous driving - a step up from the $20 billion in annual capital expenditures it forecast in January.
IBM shares fell after the company reported slowing revenue growth, with weakness concentrated in its software division. Other names on the earnings calendar for the day included Comcast, American Express, Lockheed Martin and American Airlines, all of which investors were watching for fresh signals on demand and margin trends in their respective industries.
On the macro front, upcoming data on U.S. business activity for April could offer a timely read on how firms are coping with cost pressures tied to the Middle East conflict.
Market participants entering the session faced a blend of headline risk from geopolitics and the steady drumbeat of corporate reports. The combination of higher energy prices, commentary from major companies about future spending, and the evolving ceasefire situation is likely to keep volatility elevated as traders parse incoming data and results.