TSX Futures Fall on Rising Oil and BoC Rate Hike Bets

The S&P/TSX Composite Index fell nearly 1% to around 36,000 on Thursday as rising oil prices fueled inflation concerns and reinforced expectations for higher-for-longer interest rates. Crude prices climbed amid escalation in the Middle East conflict. Markets are pricing in rate hikes from both the BoC and the US Fed this year, keeping credit-sensitive stocks under pressure amid concerns over energy-driven inflation and higher borrowing costs. Banks fell, with BMO, Scotiabank, CIBC each losing about 1%. Miners posted sharp losses as gold prices fell, with Agnico Eagle, WPM and Barrick each dropping around 4%. Tech stocks also weakened after US megacap earnings failed to impress, reigniting concerns over AI spending. Celestica tumbled more than 7% ahead of its results due Monday, while Shopify shed over 1.5% ahead of its earnings release tomorrow. Elsewhere, Waste Connections jumped nearly 6% after beating profit and revenue estimates and raising its full-year outlook.

Futures tracking Canada’s main stock index fell on Thursday as rising oil prices fueled inflation concerns and reinforced expectations for higher-for-longer interest rates. Crude prices climbed after further Houthi attacks in Saudi Arabia heightened fears of a broader escalation in the Middle East conflict and prolonged supply disruptions. Markets are pricing in rate hikes from both the Bank of Canada and the US Federal Reserve this year, keeping credit-sensitive stocks under pressure amid concerns over energy-driven inflation and higher borrowing costs. Meanwhile, global chip-related stocks weakened as earnings from US megacaps failed to impress, prompting further fears of AI spending. Separately, Canada announced a C$9 billion support package for sectors hit hard by US tariffs.

The S&P/TSX Composite Index rose 0.6% to close at 36,325 on Wednesday, supported by easing pressure on credit-sensitive stocks as oil prices fluctuated. Crude prices remained volatile ahead of next week’s Bank of Canada policy decision. A pause in the oil rally offered some relief to major banks, which have faced pressure from inflation concerns and elevated borrowing costs. RBC rose 1.2%, TD Bank gained 2%, BMO advanced 1.7% and Scotiabank added 1.6%. Still, markets expect the BoC to raise interest rates at next week’s meeting, while the federal budget is due on November 5. Elsewhere, mining stocks mostly advanced as gold prices edged higher, with Barrick gaining 0.6% and Franco-Nevada adding 0.9%. In technology, Shopify rose 0.4%, while Celestica gained 1.4%, tracking a rebound in US AI hardware stocks following strong results from SpaceX.