Futures linked to Canada’s primary stock index opened with limited direction on Tuesday as market participants sorted through new public comments on the Iran conflict and the potential economic consequences of continued disruption to oil flows.
By 07:36 ET (11:36 GMT), the S&P/TSX 60 index standard futures contract was trading mostly unchanged. The underlying S&P/TSX composite index had closed Monday up 0.3% at 33,189.32, recovering from an earlier decline that had pushed the benchmark to its lowest intraday level since February 6.
President’s remarks and strategic threats
Speaking at his Florida golf club on Monday, U.S. President Donald Trump said he expects the assault to end "very soon" while warning of additional U.S. strikes if Iran attempts to block crude shipments through the Strait of Hormuz, a maritime chokepoint through which roughly one-fifth of the world’s oil passes. The president also said he has considered taking control of the strait, comments that underscored how military options and threats to a critical energy artery are being debated publicly.
Separately, Trump indicated the U.S. military’s campaign "could go further, and we’re going to go further," and said he would kill new Iranian Supreme Leader Mojtaba Khamenei if Khamenei does not accede to Washington’s demands. The piece of background cited in reporting described Mojtaba Khamenei as a son of Ali Khamenei, who was slain in U.S.-Israeli strikes at the outset of the conflict in February, and noted that his selection is viewed as likely to sustain Tehran’s hardline position.
Escalation and responses across the region
Iranian leadership has reportedly warned that not "one liter of oil" will be allowed to transit the Strait of Hormuz should the U.S. and Israel persist in their offensive. Iran’s foreign minister, according to reporting, dismissed prospects for ceasefire talks with Washington. Israeli Prime Minister Benjamin Netanyahu said the military campaign is "not done yet," indicating that Israel’s stated objective of dismantling key clerical authorities in Iran remains in place.
On Tuesday, the conflict broadened with Iran launching additional attacks at Persian Gulf countries, while Israeli strikes targeted locations in Lebanon, including positions associated with Tehran-backed Hezbollah.
U.S. futures and a day of whipsaw trading
U.S. stock futures erased earlier gains amid persistent uncertainty over how the Iran conflict will unfold. By 07:47 ET, the Dow futures contract had declined by 71 points, or 0.2%, the S&P 500 futures were down 12 points, or 0.2%, and Nasdaq 100 futures had slipped 24 points, or 0.1%.
Equity markets experienced a volatile session on Monday as investors reacted in real time to shifting assessments of how protracted the U.S.-Israeli campaign might be. Initial market sentiment was rocked by the selection of Mojtaba Khamenei, which traders feared could entrench a hardline stance in Tehran and reduce prospects for a swift resolution. Those worries pushed oil sharply higher, stirred inflation concerns and lifted bond yields. Later in the day, moves reversed after Trump told CBS News that the war is "very complete, pretty much," a comment that helped equities finish the session on firmer footing, pushed oil lower and eased yields.
Oil and bond markets
Oil prices reacted dramatically to the ebb and flow of geopolitical risk. At one point, crude surged to as high as roughly $120 a barrel, approaching the highest levels seen since 2022 amid fears of ongoing disruptions to flows through the Strait of Hormuz. That waterway, located south of Iran, accounts for about a fifth of the world’s crude shipments, making it a critical chokepoint for global supplies.
Those supply anxieties fed into a jump in bond yields as markets weighed the likelihood that higher oil prices would translate into a renewed spike in global inflation and potentially force central banks to resume tighter monetary policy.
Analysts at BCA Research captured the immediate market reaction succinctly, noting that "Global financial markets panicked on Monday recognizing the danger of a prolonged closure of the Strait of Hormuz." This assessment reflected the swift and broad-based sensitivity of markets to the risk that oil flow disruptions would persist.
By Tuesday, those early moves had partially reversed: Brent futures were down 7.0% at $91.99 a barrel, and U.S. West Texas Intermediate crude futures had slipped 6.1% to $88.97 per barrel.
Policy responses and coordinated planning
Energy ministers from the Group of Seven advanced economies were reported to be set to hold talks on Tuesday, and G7 finance ministers had earlier discussed the potential release of emergency oil reserves as one tool to help stabilize crude markets. These discussions were cited as part of broader attempts by major economies to explore mechanisms that could blunt the economic impacts of supply shocks.
Corporate spotlight - Oracle
On the corporate calendar, Oracle is due to report earnings after the U.S. market close. Once viewed as a smaller player in cloud computing, Oracle’s profile has risen rapidly through a partnership with OpenAI that positioned the company as a key provider of the immense computing power required to train and run artificial intelligence models.
That strategic opportunity has been accompanied by intense investor scrutiny regarding Oracle’s plans to fund a substantial expansion of data-center capacity. The company said in December that it now expects to spend $50 billion in capital expenditures during its current fiscal year, up from a prior guide of $35 billion.
Market participants have reacted to the elevated spending outlook and the company’s growth trajectory. Oracle shares, which climbed to roughly $328 in September, were trading at $151.56 prior to the start of U.S. trading on Monday. The stock has declined more than 22% year to date.
Analysts at Vital Knowledge summarized the market’s stance toward the firm: "[S]entiment is still very cautious around Oracle." They also observed that, even amid the dominant focus on the Iran conflict, developments around artificial intelligence and the companies central to AI infrastructure remain among the most powerful drivers of moves within the S&P 500.
Precious metals and the dollar
Gold also reacted to the shifting risk backdrop. The metal climbed but stayed within a narrow band of recent trading, as investors sought clarity on whether geopolitical developments would translate into a longer-lasting inflation shock. The price of gold was described as residing in a $5,000-$5,200 per ounce trading range that had been established over the previous week, while market participants parsed mixed signals: a lift to gold’s safe-haven appeal from conflict-driven uncertainty versus potential damage to demand as a stronger dollar or continued central bank hawkishness could make bullion less attractive.
On Tuesday, the greenback weakened, a move that some market participants took as a sign that immediate inflation fears tied to the conflict might be easing, at least temporarily.
What traders are watching next
In the near term, investors are monitoring statements from political leaders and military developments in the Middle East for signals about the duration and scope of the conflict, as well as any concrete steps by policymakers to release oil reserves or otherwise stabilize supplies. At the same time, corporate reports such as Oracle’s earnings will be scrutinized for clues about capital spending trends in technology and the commercial demand for AI-related infrastructure.
For Canadian markets specifically, futures trading that began the day largely flat underscores the caution among investors as they await clearer directional signals from geopolitics, energy markets and major corporate news.
Summary of key market moves cited in this report:
- S&P/TSX composite index closed Monday up 0.3% at 33,189.32.
- By 07:36 ET (11:36 GMT), S&P/TSX 60 index standard futures were mostly unchanged.
- By 07:47 ET, Dow futures were down 71 points (-0.2%), S&P 500 futures down 12 points (-0.2%), Nasdaq 100 futures down 24 points (-0.1%).
- Brent futures were down 7.0% to $91.99 a barrel; WTI futures down 6.1% to $88.97 a barrel.
- Oracle shares were at $151.56 prior to U.S. trading, having fallen more than 22% so far this year; Oracle expects $50 billion in fiscal year capital spending versus a prior $35 billion estimate.
- Gold remained within a $5,000-$5,200 per ounce trading range, while the U.S. dollar weakened on Tuesday.