Futures linked to Canada’s resource-driven stock index slid on Tuesday, as the brief relief from U.S. President Donald Trump’s five-day pause on strikes against Iran’s energy infrastructure faded, with investors still gripped by uncertainty over the war in the Middle East. U.S. futures were also mildly negative.
June futures on the S&P/TSX composite index were down 0.5% as of 06:02 a.m. ET (1002 GMT).
Oil prices firmed on the day on supply concerns after Iran denied holding talks with the U.S. to end the Gulf war, contradicting Trump’s comments that a deal could be reached soon.
Now in its fourth week, the war has crippled key energy infrastructure across the Middle East and brought shipping through the Strait of Hormuz close to a standstill.
With crude among Canada’s key exports, the country’s stock market is especially vulnerable to shifts in oil prices, and the war has intensified inflation fears by lifting global energy costs.
Gold also pared some losses after a steep drop earlier in the session, as investors remained on edge over the conflict. Spot gold slipped 0.2% after touching its weakest level since November 24. Gold miners make up a significant portion of the TSX.
On Monday, the benchmark index notched its biggest gain in five weeks, lifted by hopes of easing Middle East tensions. That optimism, however, proved short-lived.
In corporate news, TransAlta Corp, which owns a fleet of power-generation assets across Canada, will be in focus after National Bank of Canada upgraded its stock to “outperform” from “sector perform.” Jamieson Wellness Inc also drew attention as CIBC initiated coverage with an “outperformer” rating and a price target of C$43.
At 6:44 a.m. ET, Dow E-minis were down 45 points, or 0.1%, S&P 500 E-minis were down 3 points, or 0.05% and Nasdaq 100 E-minis were up 8.25 points, or 0.03%.
Money markets are no longer pricing in any Fed rate cuts this year, compared with two reductions expected before the Middle East conflict erupted. Expectations for hikes nudged higher amid escalating tensions last week, but were quickly unwound after Trump’s comments on Monday, according to CME’s FedWatch Tool.
Last week, all three main U.S. indexes logged their fourth weekly decline, with the Nasdaq marking its biggest weekly drop since early February.
On the data front on Tuesday, investors will watch a flash estimate of S&P Global’s gauge of business activity in March, alongside comments from Fed Governor Michael Barr.
Among individual movers, shares of Jefferies gained 9.8% in premarket trading after the Financial Times reported that Japan’s Sumitomo Mitsui Financial Group is working on plans for a possible takeover of the investment bank.
Shares of Smithfield Foods rose 9% as the U.S. pork processor beat analysts’ estimates for fourth-quarter sales and profit.
Dexcom gained 3.1% after Evercore ISI upgraded its rating to “outperform” from “in line”.
Barclays lifted its 2026 year-end target for the S&P 500 index on Tuesday to 7,650 from 7,400, citing stronger earnings expectations that outweigh macro risks like Middle East tensions, AI-driven disruption and stress in private credit.