TSX Futures Edge Lower Ahead of Fed Decision

The S&P/TSX Composite Index edged up to trade above 35,000 on Wednesday as markets awaited the confirmation of the US-Iran peace agreement and the US Federal Reserve’s monetary policy outlook. Iran and the US remained on track to sign their deal on Friday, despite lingering uncertainty on terms. Oil prices hovered near a three-month low amid prospects of the reopening of the Strait of Hormuz and the International Energy Agency warning of a supply overhang next year. Canadian bond yields edged lower on easing energy-driven inflation concerns. Banks traded higher, with RBC up 0.5% and TD Bank and BMO adding more than 0.5%. Meanwhile, investors awaited Federal Reserve Chair Kevin Warsh’s first policy decision, with expectations pointing to an interest rate hold.

Futures tracking Canada’s S&P/TSX Composite Index edged lower on Wednesday as markets awaited further details on the US-Iran peace agreement and the US Federal Reserve’s monetary policy outlook. US President Donald Trump said the memorandum of understanding with Iran was not final. Oil prices hovered near a three-month low amid prospects of the reopening of the Strait of Hormuz and the International Energy Agency warning of a supply overhang next year. Canadian bond yields edged lower on easing energy-driven inflation concerns, supporting banking stocks and the broader index. Meanwhile, investors awaited Federal Reserve Chair Kevin Warsh’s first policy decision, with expectations pointing to an interest rate hold.

The S&P/TSX Composite Index rose 0.3% to close at 35,390 on Tuesday, supported by optimism over a potential US-Iran peace deal. US President Donald Trump said at the G7 summit that negotiations with Iran had entered a second stage. Oil prices fell as markets assessed the prospect of renewed supplies, easing concerns about energy-driven inflation and reducing fears of a hawkish shift by central banks. Lower bond yields supported financial stocks and the broader market, with RBC rising 1.1%, while TD Bank and BMO both added 0.7%. Higher gold prices lifted mining shares, with Agnico Eagle gaining 2.6%, WPM advancing 3.6%, and Barrick rising 2.3%. In contrast, lower oil prices weighed on energy stocks, with Canadian Natural down 1.7%, Suncor losing 2.4%, and Cenovus falling 3.2%. Meanwhile, home sales rose 5.5% in May, while home prices edged lower. Investors are now awaiting the US Fed's policy decision on Wednesday, with markets widely expecting interest rates to remain unchanged.