Market snapshot
Futures linked to Canada’s primary stock index inched higher on Thursday, buoyed in part by stronger gold prices and easing concerns about a prolonged disruption to global energy flows. At 07:03 ET (11:03 GMT), the S&P/TSX 60 index standard futures contract was up 4 points, or 0.2%.
On Wednesday, the S&P/TSX composite index fell 0.8% to close at 35,125.11, after briefly touching a fresh record earlier in the session.
U.S. futures and prior-session moves
Futures tied to the major U.S. averages were higher in early trade. By 07:51 ET, Dow futures had climbed 117 points, or 0.2%; S&P 500 futures were up 50 points, or 0.7%; and Nasdaq 100 futures had jumped 412 points, or 1.4%.
The main U.S. averages had declined in the previous session as U.S. government bond yields rose after policymakers opted to keep interest rates unchanged. Investors parsed both the Fed’s decision and its updated projections for signs of future tightening.
In updated guidance, the Fed’s so-called dot plot showed several officials now forecasting at least one rate increase in 2026, a shift from the March projections which indicated none. The central bank’s meeting under new Chair Kevin Warsh produced a markedly shorter policy statement that concentrated on bringing down inflation and omitted a reference to the Fed’s other statutory mandate of fostering maximum employment.
Officials signalled changes in the Fed’s broader approach, touching everything from how it communicates to how it sources data, prompting some strategists to flag that future policy cues may be less explicit. Analysts at Vital Knowledge said in a note that, "[I]t seems clear there will be a lot less hand-holding than before when it comes to guidance to markets."
Breakthrough in U.S.-Iran talks
Diplomatic developments provided relief to markets that had been bracing for extended energy market disruption. The United States and Iran signed an initial memorandum of understanding that would end hostilities and reopen the Strait of Hormuz, while talks addressing Iran’s nuclear program were scheduled to begin later this week.
U.S. President Donald Trump signed the memorandum during a dinner at France’s Versailles palace on Wednesday, an event that was also recorded and shared on social media by the French president. Speaking to reporters as he departed the dinner, Trump said the deal had been signed, but he cautioned that attacks on Iran could resume under certain conditions.
The signing was unexpected because a formal ceremony between representatives from both countries had been planned for Friday in Switzerland; the status of that event became unclear following the Versailles signing. An image distributed by Iran’s state news agency showed Iranian President Masoud Pezeshkian signing the document on Tehran’s behalf. Additional reports indicated that leaders on both sides had electronically signed the memorandum.
White House officials had not released the full text of the document, leaving many specifics unclear. U.S. officials did provide a draft version to journalists, and the text published by Iranian authorities largely mirrored the U.S. description.
Key provisions in the interim accord would end the fighting and initiate nuclear negotiations, and would reopen the Strait of Hormuz - a crucial maritime corridor that handles roughly one-fifth of global oil and liquefied natural gas volumes and had been effectively closed for months. The deal would clear passage through the strait without tolls for two months, though it reportedly does not remove fees that had been imposed in certain futures arrangements. After the initial period, the United States would lift some sanctions on Iran.
Energy market reaction
Global oil benchmarks fell after the memorandum was signed. Brent crude futures, while still above pre-conflict levels, have eased sharply from peaks reached earlier in the fighting. The initial drop followed market relief that the strait’s reopening could blunt the risk of a prolonged supply shock that had driven recent price spikes.
Market participants have expressed concern that earlier oil-driven price jumps could feed into broader inflationary pressures, which in turn might prompt central banks - including the Fed - to adopt a higher-for-longer interest-rate stance. That tension between geopolitical relief and central-bank hawkishness remains a notable influence on investor positioning.
Gold and the dollar
Gold attracted support from reduced fears of sustained oil-supply disruption, pushing the non-yielding metal higher as investors sought a hedge against geopolitical uncertainty. Gains in bullion were, however, restrained by a firmer U.S. dollar following the Fed announcement. A stronger dollar typically makes dollar-priced gold costlier for buyers using other currencies, moderating demand from international buyers.
Market implications
The combination of easing geopolitical risk and a more hawkish projected path for interest rates has left investors assessing a delicate balance. On one hand, the interim U.S.-Iran agreement lowers the near-term probability of a prolonged oil shock that could stoke inflation; on the other hand, Fed officials’ indications of potential future hikes preserve upside risks to borrowing costs that can weigh on equities and commodity-sensitive sectors.
With details of the memorandum not yet published in full, market participants will continue to watch developments in the coming days, including the planned nuclear negotiations and whether a formal signing in Switzerland proceeds as originally scheduled.