Canada's TSX Stock Index Futures Rise Amid Iranian Conflict and High Oil Prices

Investing.com - On Friday, futures linked to major Canadian stock indices rose slightly as investors closely monitor developments in the Iran war and soaring oil prices.

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As of 07:29 AM Eastern Time (20:29 Beijing Time), the S&P/TSX 60 index standard futures contract increased by 5 points, up 0.3%.

On Thursday, the S&P/TSX Composite Index fell 0.8% to 32,840.60 points — the lowest close since February 12.

Although rising crude oil prices supported energy stocks within this commodity-heavy index, gains were offset by sharp declines in financial and industrial sector stocks. Materials stocks, including metals and mining companies, also declined, weighed down by falling gold prices.

U.S. Futures Rise

Futures tied to major U.S. stock indices also gained, erasing earlier losses, even as oil prices hover near $100 per barrel amid ongoing Middle East conflict.

As of 07:40 AM Eastern Time (20:40 Beijing Time), Dow Jones futures rose 125 points, up 0.3%; S&P 500 futures increased by 20 points, up 0.3%; Nasdaq 100 futures gained 73 points, up 0.3%.

Major Wall Street indices declined in the previous trading session, with little sign that the Middle East conflict will ease soon.

The U.S. and Israel’s joint attacks on Iran have lasted over a week with little sign of weakening, and President Donald Trump stated that Washington is “completely destroying” Iran’s military and economy.

According to Axios, citing three G7 officials familiar with the calls, Trump told G7 leaders during a virtual meeting on Wednesday that Iran is “about to surrender.” However, analysts at Vital Knowledge downplayed the significance of this report, noting that Tehran has not indicated any willingness to surrender.

Specifically, Iran’s new Supreme Leader, Mojtaba Khamenei, stated that the critical Strait of Hormuz, through which one-fifth of the world’s oil flows, will remain closed.

Despite the apparent military advantage gained by the U.S. and Israel, some analysts believe Tehran may attempt to resist by restricting shipping traffic through the strait.

To counter Iran’s control of this vital passage, the U.S. Treasury announced it will allow countries to purchase some sanctioned Russian crude oil before April 11. Treasury Secretary Janet Yellen also indicated plans for the Navy to escort commercial ships passing through the strait.

U.S. Secretary of Defense Lloyd Austin and Chairman of the Joint Chiefs of Staff General Dan K. Hegseth will hold a press conference on Friday morning.

Brent Crude Fluctuates Near $100

Nevertheless, the prospect of prolonged conflict in the Middle East has pushed Brent crude oil prices to around $100 per barrel.

Brent oil experienced significant volatility this week. It briefly surged close to $120 per barrel before falling back below $90.

Capital Economics analysts note that while extreme fluctuations attract headlines, whether this rally can be sustained remains a key debate among investors and analysts.

Kieran Clancy, senior economist at Capital Economics specializing in climate and commodities, said in a report: “Currently, options markets imply a 20% probability that Brent crude will be at or above $100 per barrel in three months.”

As of 04:33 AM Eastern Time, Brent crude futures fell 1.4% to $99.14 per barrel, but are still up over 7% in the past week. Before the Iran conflict escalated, the trading price was around $70 per barrel.

Gold Likely to End Week Lower

Meanwhile, spot gold is expected to decline for the second consecutive week, reflecting market concerns that the Iran war could trigger energy-driven inflation spikes.

Most of the oil and natural gas passing through the Strait of Hormuz are used in products like fertilizers and plastics, meaning a sudden rise in their prices could lead to serious inflationary pressures globally.

These concerns may cause central banks, including the Federal Reserve, to reconsider recent rate cuts. Higher borrowing costs could attract more foreign investment and strengthen the dollar. The dollar index, which tracks the dollar against a basket of major currencies, surged as the conflict intensified.

Although gold is often viewed as a safe haven during geopolitical crises, the strengthening dollar could make gold more expensive for overseas buyers, dimming its appeal.

PCE Data Coming Soon

On Friday, the U.S. Personal Consumption Expenditures (PCE) Price Index for January will be released, potentially providing more details on inflation.

Excluding volatile items like food and energy, the so-called “core” PCE is expected to be 3.1% over the 12 months ending in January, slightly higher than December’s 3.0%. This indicator, closely watched by financial markets, is one of the Federal Reserve’s preferred measures for setting monetary policy.

ING analysts say that since hitting a low of 2.6% last summer, core PCE has been diverging from the Fed’s 2% target.

They wrote: “This limits the Fed’s ability to cut rates this year, and we expect to hear more from the Fed at next Wednesday’s FOMC meeting.”

On Wednesday, the Labor Department reported that the Consumer Price Index increased moderately year-over-year at 2.4%.

However, it’s crucial to note that these data largely exclude the period of the Iran war, which began in late February with large-scale U.S. and Israeli airstrikes on Iran. Since the conflict started, inflation outlooks have worsened.

Additionally, the January Job Openings and Labor Turnover Survey (JOLTS) — a proxy for hiring activity — will also be released. Beyond inflation, Fed officials have been assessing the U.S. labor market, which recent data suggest remains unstable.

Adobe Pre-Market Drop

In individual stocks, Adobe’s stock fell 7.5% in pre-market trading after the creative software giant announced that its CEO, Shantanu Narayen, who has served for 18 years, will step down, and the board has begun searching for a successor.

Narayen, a veteran at Adobe since 1998, has been promoted multiple times and became CEO in December 2007. One of his key initiatives was transitioning the company’s various software products to a cloud-based subscription model.

Under Narayen’s leadership, Adobe’s annual revenue soared from $3.58 billion to $23.77 billion, despite recent questions about the disruptive potential of new AI-enhanced tools.

Based in San Jose, California, Adobe is known for its software products like Photoshop and Premiere Pro, and reported quarterly revenue and profit that exceeded expectations, with guidance for the current quarter also mostly above forecasts.

Meanwhile, cloud data management company Rubrik rose slightly before the market open, after beating expectations for Q4 earnings per share, revenue, and annual recurring subscription revenue. Rubrik said these results indicate the business is “becoming an increasingly key platform in the AI era.”

Aside from software, Ulta Beauty also declined after reporting that its quarterly earnings per share slightly missed estimates, and its fiscal 2027 guidance was disappointing.

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