Market open
Futures linked to Canada’s main equity gauge ticked up on Friday as investors kept a close watch on unfolding events in Iran and the impact of elevated oil prices on corporate sectors. By 07:29 ET (11:29 GMT), the S&P/TSX 60 index standard futures contract had increased by 5 points, equivalent to approximately 0.3%.
That modest futures advance followed a sharp decline in the cash market the prior session. On Thursday, the S&P/TSX composite index fell 0.8% to close at 32,840.60, marking its lowest closing level since February 12. The drop reflected uneven sector performance across the commodities-heavy Canadian benchmark.
Sectors diverge
Energy stocks benefited from a jump in crude prices, lending support to the overall index, but those gains were largely offset by weakness elsewhere. Financial and industrial sector stocks slumped as investors reacted to heightened geopolitical risk and the potential economic fallout. The materials group, which includes metal-mining companies, also retreated, pressured by a decline in gold prices.
U.S. futures and broader market tone
Across the border, futures tied to the major U.S. indices advanced, erasing earlier losses even as oil traded close to $100 a barrel amid persistent fighting in the Middle East. By 07:40 ET (11:40 GMT), Dow futures were up 125 points, or about 0.3%; S&P 500 futures had gained 20 points, or 0.3%; and Nasdaq 100 futures rose 73 points, also roughly 0.3%.
The main averages on Wall Street had fallen in the previous session amid concerns over the conflict’s persistence. The joint U.S.-Israeli assault on Iran has now stretched beyond a week with limited signs of abating. President Donald Trump said Washington is "totally destroying" Iran’s military and economy.
In a separate account, Mr. Trump reportedly told G7 leaders during a virtual meeting that Iran is "about to surrender," according to a report citing three officials from G7 countries who were briefed on the call. Analysts at Vital Knowledge, however, cautioned that the market relevance of that report was limited because Tehran has not publicly indicated a willingness to capitulate.
Strait of Hormuz tensions
In a development that has direct implications for global energy flows, Iran’s new Supreme Leader, Mojtaba Khamenei, said the Strait of Hormuz - the critical waterway through which roughly a fifth of the world’s oil is shipped - will remain closed. Observers have noted that while the U.S. and Israel appear to hold military dominance in their joint campaign, Tehran may be attempting to push back by disrupting shipping through the strait.
To blunt the potential supply shock from Iran’s control over the choke point, the U.S. Treasury Department announced it would allow countries to buy some sanctioned Russian crude until April 11. Treasury Secretary Scott Bessent also said the U.S. plans for the Navy to provide escorts for commercial vessels traversing the strait.
U.S. Defense Secretary Pete Hegseth and Gen. Dan Caine, Chairman of the Joint Chiefs, were scheduled to hold a news conference on Friday morning.
Oil price volatility
The prospect of an extended conflict that could involve much of the major oil-producing region has driven Brent crude near $100 a barrel. Brent has experienced extreme swings this week, at one point rising to almost $120 a barrel before sliding to a level briefly below $90 a barrel.
Despite the volatile moves, whether the higher prices will persist is a key point of debate among investors. Kieran Tompkins, Senior Climate and Commodities Economist at Capital Economics, highlighted that options-market pricing implies about a one-in-five chance of Brent crude being $100 per barrel or higher in three months’ time.
By 04:33 ET on Friday, Brent crude futures had retreated 1.4% to $99.14 a barrel, but were on track for a weekly gain of more than 7%. For context, before the outbreak of hostilities involving Iran, Brent had been trading around $70 a barrel.
Gold and the dollar
Spot gold was positioned to post a second consecutive weekly decline, despite the geopolitical shocks that often lift bullion as a safe-haven asset. Market participants have been concerned that an energy-driven surge in inflation could prompt central banks to reassess plans for rate relief.
Large portions of the oil and gas moving through the Strait of Hormuz are inputs to industrial products such as fertilizer and plastics. A sudden and sustained increase in those commodity prices could translate into considerable inflationary pressures across global economies, potentially influencing policy decisions by central banks including the Federal Reserve.
Those dynamics can strengthen the U.S. dollar by attracting foreign capital to higher-yielding assets, and the dollar index has risen as the conflict has intensified. A firmer dollar tends to make gold more expensive for overseas buyers, which can blunt bullion’s appeal even amid geopolitical stress.
U.S. inflation data in focus
Investors were also awaiting new U.S. inflation readings that could clarify the near-term outlook. The personal consumption expenditures price index for January was due on Friday. The "core" PCE measure, which excludes food and energy, was forecast to be 3.1% year-over-year in January, modestly above December’s 3.0% reading.
The Commerce Department’s PCE gauge is closely watched by financial markets because it is one of the measures the Fed monitors when setting policy. Since hitting a low of 2.6% last summer, core PCE has been drifting away from the Fed’s 2% target, according to analysts at ING, which they said constrains the central bank’s ability to cut rates this year.
Those analysts added that the Fed’s stance will come into sharper focus at next Wednesday’s Federal Open Market Committee meeting, where monetary policy decisions and forward guidance will be reviewed.
By contrast, a consumer price growth gauge from the Labor Department released on Wednesday showed a relatively modest 2.4% year-on-year increase. However, those data largely predate the recent burst of hostilities between the U.S.-Israeli coalition and Iran, and the outlook for inflation has since become more uncertain.
Alongside inflation figures, a JOLTS-style tracker of job openings and labor turnover for January was also scheduled for release. Fed officials continue to weigh labor market conditions alongside inflation when assessing policy, and recent datapoints have suggested softness in some areas of hiring.
Company-specific moves
In corporate news ahead of the U.S. open, Adobe shares plunged 7.5% in premarket trading after the software company said its chief executive of 18 years, Shantanu Narayen, will step down and the board has begun a search for his successor.
Narayen has been with the company since 1998 and rose through the ranks to become CEO in December 2007. During his tenure, Adobe shifted much of its software into a cloud-based subscription model. Under his leadership, annual revenue grew from $3.58 billion to $23.77 billion. The company still faces questions over competitive pressures from new artificial intelligence-enhanced tools.
Despite the leadership announcement, Adobe reported a quarterly top- and bottom-line beat and offered current-quarter guidance that was largely above expectations.
Cloud-data management firm Rubrik moved higher in premarket dealings after reporting better-than-expected fourth-quarter results for income per share, revenue and subscription annual recurring revenue. Rubrik said those returns demonstrated the business is "an increasingly critical platform for the AI era."
Meanwhile, Ulta Beauty shares fell after the cosmetics retailer reported a modest miss on quarterly earnings per share and provided fiscal 2027 guidance the market viewed as underwhelming.
Implications for investors
Investors face a nuanced landscape in which commodity price swings tied to geopolitical events are interacting with incoming economic data that together shape expectations for corporate profits and central-bank policy. Energy-related equities have benefited from rising crude, but weakness in other cyclical sectors has capped broader index gains. Market participants are balancing near-term event risk with the timing and content of key data releases and central-bank meetings.
Key points
- Canadian S&P/TSX 60 futures rose about 0.3% by 07:29 ET amid geopolitical tensions and higher oil prices.
- Brent crude hovered near $100 a barrel after reaching nearly $120 at its peak this week, with options pricing implying a roughly 20% chance of Brent maintaining $100 or more in three months.
- Major U.S. futures recovered losses, while investors awaited U.S. PCE inflation data and a Federal Reserve policy meeting next week.
Risks and uncertainties
- Ongoing conflict involving Iran raises the risk of sustained disruptions to shipping through the Strait of Hormuz, which could keep oil prices elevated and affect energy-intensive industries.
- Escalating energy costs could feed into broader inflation measures, complicating central-bank plans for rate cuts and influencing financial-sector and consumer-sensitive equities.
- Market reactions to leadership changes and earnings surprises at large companies, such as Adobe and Ulta Beauty, add idiosyncratic volatility to tech and consumer discretionary stocks.
Conclusion
As markets opened on Friday, investors were balancing the immediate market impact of geopolitical developments - most notably the military campaign involving Iran and its implications for global oil flows - against incoming U.S. inflation data and corporate earnings signals. Energy has been a primary driver of recent moves, but sectoral divergence means gains in one area have been offset by losses in others, keeping overall indices subdued.