Futures linked to Canada’s energy- and resource-focused primary exchange pointed downward Wednesday after developments in the Middle East and comments from the U.S. president stoked investor nerves.
By 06:28 ET (10:28 GMT), the S&P/TSX 60 index standard futures contract was down 25 points, or about 1.2%.
The Toronto Stock Exchange’s S&P/TSX composite index, however, ended Tuesday with a small gain of 0.2%, closing at 35,272.59. That advance came as energy-sector strength offset selling pressure in semiconductor-related names after Samsung Electronics reported earnings that fell short of high expectations.
U.S. futures slide
U.S. equity futures also moved sharply lower midweek following remarks by President Donald Trump, who questioned the status of a provisional deal with Iran. By 06:48 ET, Dow futures were lower by 551 points, or roughly 1.1%, S&P 500 futures had fallen about 63 points, or 0.8%, and Nasdaq 100 futures declined around 344 points, or 1.2%.
Speaking at a NATO summit in Turkey, Mr. Trump accused Tehran of breaching the fragile truce and stated: "We make a deal, and everyone’s agreed. No nuclear weapons. We make a deal. They go outside, talk to the press, they say we never even talked about it. There’s something wrong with them. They’re cuckoo. As far as I’m concerned, it’s over."
Investor sentiment had already been fragile before those remarks. Iranian armed forces said on Wednesday they had attacked U.S. military sites in Kuwait and Bahrain, in retaliation to American strikes on targets in Iran and Washington’s decision to revoke a sanctions waiver on Iranian oil.
Oil surge
The escalation in hostilities delivered a sharp lift to crude prices, reviving concerns that higher energy costs could add to inflationary pressure and complicate the Federal Reserve’s policy path. At 06:48 ET, Brent crude futures, the global benchmark, were up about 5.2% at $78.01 a barrel, while U.S. West Texas Intermediate futures had gained roughly 5.1% to $74.00 a barrel.
Crude had fallen back to pre-war lows in June after the U.S. and Iran reached a preliminary peace agreement that also saw improved vessel traffic through the Strait of Hormuz, a crucial shipping channel for around a fifth of the world’s oil and liquefied natural gas. The recent flare-up threatens to undermine that accord, and the prospects for further peace talks between the two countries now appear uncertain.
Gold retreats
Precious metals gave back ground amid the market rotation. By 05:36 ET, spot gold had dipped about 1.3% to $4,053.49 an ounce, and gold futures were lower by around 2.3% at $4,063.40 an ounce.
Market participants continue to weigh whether central banks, and particularly the Federal Reserve, will respond to renewed inflation concerns with tighter policy. Short-term wagers on an imminent Fed rate increase had eased after last week’s weaker-than-expected payrolls report, but those expectations picked up again following the sequence of tit-for-tat strikes, according to analysts at Britannia Global Markets.
Higher interest rates tend to reduce the appeal of non-yielding assets such as gold, while a firmer U.S. dollar can make bullion more costly for overseas buyers.
What’s next for markets
Markets await the release later Wednesday of the minutes from the Federal Reserve’s June meeting. At that gathering, the Fed left its policy rate unchanged in a range of 3.5% to 3.75%, though some projections from Fed members during that meeting included forecasts of rate increases in 2026. Against a backdrop of renewed geopolitical risk and evolving expectations for monetary policy, traders are reassessing the outlook for interest rates, inflation, and asset prices.
In the near term, energy producers and related sectors are likely to remain sensitive to developments in the Gulf region, while rate-sensitive assets and safe-haven arenas such as gold will also be closely watched as investors parse the implications of both geopolitical and economic signals.