Canada's TSX stock index futures decline as Iran conflict dampens market sentiment

Investing.com - On Friday, futures linked to Canada’s major stock indexes declined as investors assess the latest developments in the ongoing Iran conflict.

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As of 06:50 AM Eastern Time (19:50 Beijing Time), the S&P/TSX 60 index standard futures contract fell by 9 points, or 0.5%.

On Thursday, the S&P/TSX Composite Index dropped 1% to 33,609.97, marking its lowest close since February 19.

U.S. Treasury yields rose and the dollar strengthened, partly due to rising oil prices caused by Middle East tensions, which pressured gold prices. The materials sector, heavily weighted in the TSX index with mining stocks, declined 3.9%.

Financial stocks, another key component of the index, also retreated.

U.S. Stock Index Futures Decline

U.S. stock index futures fell amid escalating Middle East tensions and soaring oil prices, continuing recent declines ahead of the key U.S. employment report.

As of 05:35 AM Eastern Time, Dow futures dropped 234 points, or 0.5%; S&P 500 futures declined 43 points, or 0.6%; Nasdaq 100 futures fell 198 points, or 0.8%.

Major Wall Street indexes declined in the previous trading session, weighed down by rising oil prices and ongoing concerns that supplies through the narrow Strait of Hormuz in southern Iran could be cut.

The Dow Jones Industrial Average fell nearly 785 points, or 1.6%, marking its second consecutive weekly decline and its worst weekly performance since October last year. The S&P 500 declined about 0.6%, and the Nasdaq Composite fell nearly 0.3%.

Oil Prices Surge, Market Sentiment Deteriorates

Market sentiment took a severe hit this week as Middle East conflict caused U.S. crude futures to surge nearly 21%. After joint U.S. and Israeli strikes on Iran, the conflict spread to other parts of the Middle East and the Persian Gulf, threatening oil supplies from this major producer region.

Oil prices’ surge heightened inflation concerns. According to AAA, after the attacks began, the average U.S. gasoline price rose by 27 cents to $3.25 per gallon.

Rising energy prices often squeeze corporate profit margins and consumer spending, complicating the Federal Reserve’s efforts to control inflation.

There are few signs the conflict will end soon. In fact, U.S. Defense Secretary Pete Hegseth said Thursday evening that “firepower against Iran and Tehran is about to increase significantly,” while earlier on Friday, Israel announced it had begun “large-scale” strikes against infrastructure targets in Tehran.

U.S. President Donald Trump also told Reuters in a phone interview that after last week’s airstrikes killed Iran’s top leader Ayatollah Ali Khamenei, the U.S. must play a role in deciding Iran’s next leader, indicating potential U.S. involvement in the country’s affairs in the near future.

Crude Oil Expected to Post Large Weekly Gains

Oil prices surged sharply on Friday, likely posting significant weekly gains amid escalating Middle East tensions and fears of global supply disruptions.

Brent crude futures rose 4.7% to $89.38 per barrel, while U.S. WTI crude futures increased 6.3% to $86.11 per barrel.

Since the start of the conflict, Brent has risen 18% over four trading days, and WTI has gained 21%.

To ease some supply concerns, the U.S. announced it would allow Russian oil to be sold to India within 30 days.

However, this has had little impact on soaring oil prices, as traders remain worried that the conflict could close the Strait of Hormuz— a narrow waterway between Iran and Oman through which about 20% of global oil supplies are transported.

Gold Likely to Post Weekly Decline

Gold prices edged higher but are expected to decline for the week, as a stronger dollar and rising U.S. Treasury yields offset safe-haven demand.

As of 04:35 AM Eastern Time (17:35 Beijing Time), spot gold increased 0.2% to $5,090.70 per ounce, and gold futures rose 0.4% to $5,098.49 per ounce.

Precious metals are set to fall over 3% this week, pressured by recent dollar strength and diminished expectations for rate cuts.

Jobs Data Coming Soon

Market participants are awaiting the release of the February U.S. non-farm payroll report later this evening, which could provide new signals on labor market health and monetary policy outlook.

Economists expect the U.S. added about 58,000 jobs in February, with the previous month’s data exceeding expectations, and the unemployment rate likely remaining around 4.3%.

The employment report is expected to play a key role in shaping market expectations for Fed rate cuts this year. A strong labor market could give policymakers room to keep interest rates higher for longer.

Traders currently expect the Federal Reserve to ease policy later this year, although recent economic resilience and geopolitical risks have tempered expectations for aggressive rate cuts.

Marvell Raises Revenue Guidance

In the corporate sector, semiconductor company Marvell Technology (NASDAQ: MRVL) raised its full-year revenue outlook, benefiting from sustained strong data center spending by large AI-driven enterprises.

Major companies like Amazon and Microsoft have made AI a core focus of their businesses, planning to invest billions of dollars to rapidly build data centers to power and train this emerging technology.

Companies like Marvell, which design and supply internal pipelines for data transfer between large-scale computing systems, have been major beneficiaries of this massive spending.

Additionally, apparel retailer Gap disappointed investors worried about tariffs with its fiscal 2026 guidance, while wholesale retailer Costco reported Q2 revenue and profit growth, with membership fees totaling $1.36 billion, up 13.6% year-over-year.

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