TSX futures rise as oil, gold climb amid ongoing Iran conflict

Investing.com - Futures linked to Canada’s main stock exchange ticked higher on Wednesday, buoyed by an increase in oil and gold prices as the conflict in Iran stretched into a fifth day.

By 06:46 ET (11:46 GMT), the S&P/TSX 60 index standard futures had risen by 11 points, or 0.5%.

The S&P/TSX composite index slipped by 2.2% to 33,784.94 on Tuesday, retreating from a record high close in the preceding session. It was the average’s biggest drop since February 12. Jitters around the impact of the fighting between Iran and the joint forces of the U.S. and Israel, as well as a slide in gold prices sparked by strength in the U.S. dollar, weighed on Canadian shares.

But bullion prices have since moved higher, while crude has risen despite some moderation, providing support to the commodities-heavy TSX index.

U.S. futures erase earlier losses

U.S. stock index futures edged higher, overturning earlier losses following reports that Iran could be suing for peace, potentially leading to an end of the ongoing conflict in the Middle East.

At 06:59 ET, Dow Jones Futures were mostly unchanged, S&P 500 Futures had gained 9 points, or 0.1%, and Nasdaq 100 Futures had advanced 54 points, or 0.2%.

Futures retreated after a negative session on Wall Street, with all three benchmarks clocking deep losses as risk appetite remained frail. Growing caution before a host of key economic readings due this week also weighed.

Iran suing for peace - New York Times

U.S. Admiral Brad Cooper, who leads U.S. forces in the Middle East, has stated that Iran’s air defenses had been badly degraded, its navy had no operational vessels on key waterways after 17 were sunk, and that more than 2,000 Iranian targets had been hit.

Additionally, Israel continued to target the pro-Iran Hezbollah group in neighboring Lebanon, after the militants fired on Israel in retaliation for the death of Supreme Leader Ayatollah Ali Khamenei in the opening salvos on Saturday.

Iran has fired missiles and drones at neighbouring Arab states that host U.S. bases, broadening the conflict around the region.

However, the New York Times reported Wednesday that Iranian operatives have made an offer to discuss terms for ending the war, with the newspaper citing officials briefed on the Iranian outreach to the CIA.

The conflict’s inflationary effects were a key point of concern for markets, given that a prolonged war could greatly disrupt global energy supplies, driving up oil and gas prices. Oil prices rose sharply this week on expectations of supply disruptions.

A prolonged rally in oil is expected to drive up global inflation, hampering economic growth and eliciting a more hawkish stance from major central banks.

Labor data in spotlight

That said, gains are limited as investors awaited cues on the world’s largest economy.

The economic data slate includes the monthly ADP release, as well as the Fed’s Beige Book ahead of the FOMC meeting in the middle of March.

Challenger job cuts data for February and a weekly jobless claims reading are due on Thursday, followed by nonfarm payrolls data for February on Friday.

The latter is expected to provide the most definitive cues on the labor market, and is likely to factor into expectations for interest rates in the coming months.

Fears of high energy-driven inflation saw traders largely pare back bets that the Federal Reserve will cut interest rates in the near-term.

Markets see rates remaining largely unchanged until at least July, CME FedWatch showed.

CrowdStrike tops Q4 estimates

On the earnings front, CrowdStrike reported fourth-quarter results that topped Wall Street estimates and issued largely in-line guidance for fiscal 2027, at a time when investors have been concerned about AI disruption across the software sector.

Executives said that adoption of AI across enterprises is creating additional demand for security tools, positioning CrowdStrike to expand as companies secure AI workloads and data.

More earnings from the likes of Abercrombie & Fitch (NYSE:ANF), Broadcom (NASDAQ:AVGO) and Okta (NASDAQ:OKTA) are scheduled Wednesday.

Crude higher, but off highs

Oil prices have pushed higher, although some of the frothy gains have dissipated on reports that Iran is seeking a peace agreement.

Brent crude prices, which were trading at around $73 a barrel prior to the start of the assault on Iran, have surged this week. The Brent futures contract was last trading at $82.41 a barrel, a rise of 1.2%. U.S. West Texas Intermediate crude future had moved up 0.2% to $74.68 a barrel.

For markets, a central worry is that the violence in the Middle East may cause protracted disruptions to tanker traffic through the Strait of Hormuz, a vital waterway through which a significant portion of the world’s oil and gas flows.

Gold prices bounce

Gold prices rose Wednesday, bouncing after the previous session’s sharp losses as investors reassessed safe-haven demand amid an escalating U.S.–Iran conflict and a sharply stronger U.S. dollar.

At 07:12 ET, Spot gold rose 2.2% at $5,197.44 an ounce, and U.S. Gold Futures gained 1.7% to $5,210.30/oz.

The yellow metal dropped 4.5% on Tuesday, driven by a surge in the dollar and rising U.S. Treasury yields.

The U.S. dollar index inched down after jumping nearly 1.5% in the last two days. The greenback reached six-week highs overnight, bolstered by haven demand and reduced expectations for Federal Reserve rate cuts in the coming months.