TSX Futures Inch Down on Renewed US-Iran Tensions

Futures tracking the S&P/TSX Composite Index edged lower on Thursday as renewed tensions in the Middle East tempered hopes for a peace deal, while investors digested results from major banks. Iran targeted a US air base on Thursday after the US struck what it described as an Iranian drone operation near the Strait of Hormuz. Oil prices rebounded from the recent pullback, fueling lingering stagflation concerns. Meanwhile, RBC, Canada’s largest lender, reported higher second-quarter profit as market volatility boosted trading revenue. TD Bank also posted a jump in adjusted quarterly profit on stronger net interest income. Elsewhere, mining stocks remained under pressure as gold prices fell to their lowest level in nearly two months. Yields rose after US PCE inflation increased at its fastest pace in three years in April, driven by higher energy prices amid the war with Iran, fueling expectations of a hawkish stance.

The S&P/TSX Composite Index fell 0.7% to close at 34,412 on Wednesday as investors assessed mixed signals regarding prospects for a US-Iran deal to end the war and restore energy flows through the Strait of Hormuz. The US denied an Iranian media report on a draft interim agreement stating that traffic through Hormuz could return to normal within a month after the deal takes effect. Miners led losses as gold prices declined, with Agnico Eagle down 3%, Barrick losing 1.7%, and WPM shedding 2.4%. The energy sector also weakened as oil prices fell below $90 per barrel, with Canadian Natural and Suncor down 2.2%, while Imperial Oil lost 3.4%. Financials traded mixed despite positive earnings from three of Canada’s six largest lenders. BMO rose 0.8%, BNS added 0.5%, and NBC fell 4% after reporting second-quarter profits that beat estimates on strong domestic and capital markets income. Meanwhile, RBC, TD Bank, and CIBC traded lower ahead of earnings due on Thursday.

The S&P/TSX Composite Index fell nearly 0.5% to trade near 34,500 on Wednesday as investors monitored developments in the Middle East and assessed earnings from major banks. An unofficial draft of a US-Iran interim peace deal stated that maritime traffic through the Strait of Hormuz could return to normal within a month of the agreement being finalized, although it remains unclear whether the US has agreed to the terms. Oil prices fell, driving Canadian Natural and Suncor down 2%. Gold prices also declined, with Agnico Eagle and WPM both losing 1%. In finance, BMO rose 0.4% after posting a jump in profit driven by strong capital markets performance, while Scotiabank gained 1% on higher trading revenue amid volatile markets. NBC fell 2% ahead of results due later in the day, while RBC, TD Bank, and CIBC also traded lower before reporting on Thursday.