Futures linked to Canada’s principal stock benchmark were broadly unchanged on Thursday as market participants monitored fresh Middle East developments and positioned for a major U.S. employment release later in the week.
By 07:46 ET (11:46 GMT), the S&P/TSX 60 index standard futures contract had inched higher by 1 point, or about 0.1%.
The broader Toronto Stock Exchange S&P/TSX composite index closed down 1.1% at 34,801.54 on Wednesday, stepping back from a recent record as investor sentiment was shaken by a new round of air strikes between the U.S. and Iran.
Wall Street futures and the tech influence
In U.S. futures trading, moves were mixed as investors digested corporate results and geopolitical headlines. At 05:05 ET (09:05 GMT), Dow futures were trading higher by 134 points, or roughly 0.3%, while S&P 500 futures were down about 36 points, or 0.5%. Nasdaq 100 futures showed the largest decline, falling 339 points, or 1.1%.
Broadcom’s second-quarter report played a notable role in the overnight tone. Although the company posted a 48% revenue increase driven by demand for artificial intelligence chips, its guidance disappointed some investors and the stock tumbled sharply in premarket trading. The shortfall in expected forward momentum in Broadcom’s results rippled through the semiconductor group, contributing to early weakness in major chipmakers.
Despite the Broadcom reaction, the semiconductor sector more broadly has shown resilience. The article notes that semiconductor shares advanced in recent sessions, underscoring continued enthusiasm for AI-related demand that has so far held up amid wider geopolitical unease. New data tracking monthly private payrolls and services-sector activity also suggested the core of the U.S. economy was holding up despite the Iran conflict, although a Federal Reserve report flagged rising margin pressure on businesses and growing consumer headwinds, according to analysts at Vital Knowledge.
Broadcom’s results and sector spillover
Broadcom’s revenue surge of 48% in the second quarter was driven by the pickup in AI chip demand. Still, the company’s guidance for the coming period did not meet some investors’ lofty expectations, prompting a sharp premarket drop despite the stock having gained 38% so far this year.
The company maintained its 2027 financial outlook and reiterated a projection of more than $100 billion in AI semiconductor revenue through that horizon, but did not provide the sort of incremental upside - a classic "beat-and-raise" dynamic - that investors had been anticipating from a leader in the AI hardware space. For the current quarter, Broadcom’s CEO Hock Tan said AI chip revenue would be $16 billion, more than triple the amount from a year earlier.
Analysts at Vital Knowledge attributed part of the heavy sell-off to the exceptionally high bar set by recent results from peer companies and partners. "A big part of the negative reaction is simply expectations and price level," they said. "[Broadcom] is reporting toward the end of the season, after weeks of great-to-amazing results from its competitors and partners, which meant the bar was extremely high."
Losses in Broadcom then spilled over into other major chipmakers, with Intel, Micron Technology, AMD and Nvidia trading lower in premarket activity.
Diplomatic movements and conflict dynamics in the Middle East
Traders continued to digest a wave of diplomatic and military updates from the Middle East that were shaping risk sentiment. An important development on the ground involved Israel and Lebanon agreeing to renew a fragile ceasefire, a move that raised hopes for progress toward a broader U.S.-Iran settlement. The agreement between Washington and Tehran has been tied to a halt in hostilities in Lebanon, where Israeli forces and Iran-backed Hezbollah fighters have been clashing.
After a fourth round of U.S.-mediated talks, Israel and Lebanon said their truce would be contingent on "a complete cessation of Hezbollah fire and the evacuation of all Hezbollah operatives" from areas south of the Litani River in southern Lebanon. A joint statement said, "These steps will enable progress towards a comprehensive peace and security agreement." Notably, Hezbollah did not participate in the negotiations.
On the diplomatic front, U.S. President Donald Trump indicated that progress in talks with Iran could be achieved as soon as the coming weekend, while Iran’s foreign minister said that contact with Washington had not been severed. Earlier this week, media reports suggested Tehran had paused sending messages to the U.S. through intermediaries.
Domestically in the U.S., congressional pressures were becoming more visible. The House of Representatives passed a resolution aimed at curbing the president’s ability to continue the conflict, a move that could increase calls for de-escalation at home. The measure still requires Senate approval and would need two-thirds majorities in both chambers to override a presidential veto.
Commodities and yields
Commodity markets reflected the shifting risk picture. Brent crude futures, the global benchmark, were last reported down about 1.5% at $96.30 a barrel, while U.S. West Texas Intermediate crude fell 1.2% to $94.84 a barrel. Even with that pullback, oil remained well above pre-conflict levels, a signal that supply constraints linked to disruptions around the Strait of Hormuz continue to support prices. The Strait - a narrow shipping channel off Iran’s southern coast - has effectively been closed to commercial traffic since the start of the joint U.S.-Israeli assault on Iran in late February, keeping upward pressure on oil prices.
Gold prices appreciated as crude eased, helping to alleviate some inflation concerns tied to energy costs. Investors have worried that an energy-driven price shock could force central banks, including the Federal Reserve, to maintain or even increase interest rates to contain inflation - an environment typically unfavorable for a non-yielding asset like gold. In parallel, the rate-sensitive U.S. two-year Treasury yield, which had risen sharply in recent months, moved lower on Thursday, and the 10-year benchmark yield also eased. Yields generally move inversely to bond prices.
Where markets are focused next
Across equities, fixed income and commodities, the market narrative remains centered on how persistent the Middle East tensions will be and whether that persistence could force a reassessment of the Federal Reserve’s interest rate path. At the same time, investors are parsing corporate earnings - especially among semiconductor suppliers to cloud providers and AI developers - for signals about demand strength and margin trends.
Near-term volatility in technology shares is a key watch area given the sector’s outsized influence on U.S. benchmarks. Meanwhile, energy markets will likely remain sensitive to any new developments that affect shipping in and out of the Strait of Hormuz. The coming U.S. employment report is expected to be another critical data point for markets, potentially influencing expectations for the timing and scale of future interest-rate moves.
For now, Canadian equity futures have shown caution rather than a clear directional move, reflecting a market balancing geopolitical risk, corporate earnings momentum, and incoming economic data.