Futures linked to Canada's main stock index pointed higher on Wednesday, driven by energy stocks reacting to fluctuating oil prices. The S&P/TSX 60 index standard futures contract rose by 5 points, or 0.2 percent, by 07:26 ET. This movement follows a Tuesday session where the S&P/TSX composite index advanced 0.5 percent to close at 36,107.96, a level just below a more than three-week high set on Friday.
In the U.S., S&P 500 and Nasdaq 100 futures also edged higher as investors evaluated corporate earnings and persistent uncertainty regarding artificial intelligence and the Middle East conflict. By 07:35 ET, the S&P 500 futures contract had gained 19 points, or 0.3 percent, while Nasdaq 100 futures rose by 191 points, or 0.6 percent. Dow futures ticked up by 45 points, or 0.1 percent. The main Wall Street averages finished in mixed fashion on Tuesday, with the S&P 500 and blue-chip indices posting gains while the tech-heavy Nasdaq ended slightly lower.
Oil price volatility significantly influenced market sentiment during the early session. Unconfirmed reports that Qatar and Pakistan proposed reviving talks to conclude the Iran war briefly sent oil prices down to $106 a barrel from $112 a barrel. This dip in energy costs bolstered investor confidence, countering recent concerns about the sustainability of massive debt-fueled AI infrastructure spending and elevated borrowing costs. Analysts at Deutsche Bank noted that this relief from energy costs allowed equities to rally as investors overcame earlier AI jitters.
However, benchmark Brent crude futures moved higher later in the session, reaching approximately $110 a barrel. Traders reacted to a report stating that Iran's president believes the U.S. will attack again if negotiations proceed. This renewed tension in energy markets contrasts with the earlier sentiment improvement, highlighting the ongoing instability in global supply expectations.
Gold prices turned higher as traders looked ahead to a key Federal Reserve interest rate meeting next week. At 07:47 ET, spot gold had fallen 0.1 percent to $4,121.13 an ounce, while gold futures declined 0.1 percent to $4,138.51 an ounce. Gold has fallen more than 1 percent since the start of the week and remains down around a fifth since the Iran conflict erupted in late February. The conflict disrupted energy markets and pushed up oil prices, fueling worries over energy-driven inflation that have underpinned bets that central banks, including the Federal Reserve, may need to tighten monetary policy. Rising borrowing costs could weigh on gold, as the asset yields no interest.
With limited new data available before the Fed's upcoming policy decision, market expectations remain steady. Comments from Chair Kevin Warsh on Friday did not significantly alter the outlook that the central bank will hold rates constant on October 27-28, before increasing borrowing costs at its final meeting of the year in December.