Canadian TSX stock index futures decline, oil prices remain volatile, Iran conflict persists

Investing.com - On Friday, futures linked to major Canadian stock indexes edged lower as investors continued to focus on rising oil prices and the latest developments in the Iran war.

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As of 08:31 AM Eastern Time (20:31 Beijing Time), the S&P/Toronto 60 Index standard futures contract fell by 4 points, or 0.2%.

On Thursday, the S&P/TSX Composite Index declined by 1.4%, closing at 31,854.98, its lowest close since February. Since the outbreak of conflict in late February, the index has fallen over 7%.

Gold prices declined, dragging down Canadian-listed gold mining stocks, while oil prices continued to rise amid the Middle East conflict, supporting energy stocks.

US Futures Decline

On Friday, US stock index futures came under pressure. As of 07:46 AM Eastern Time, Dow Jones futures dropped 151 points, or 0.3%; S&P 500 futures fell 30 points, or 0.4%; Nasdaq 100 futures declined 150 points, or 0.6%.

Major stock indexes fell in the previous trading session, weighed down by soaring energy prices and warnings from the Federal Reserve about persistent inflation pressures.

After Israel launched an attack on South Pars (Iran’s region containing the world’s largest natural gas field), Tehran retaliated against key Middle Eastern energy infrastructure, including a major natural gas production center in Qatar.

Brent crude oil prices surged to around $119 per barrel, and European benchmark natural gas prices also rose sharply.

As the US and Israel worked to signal that there would be no further strikes on South Pars, markets rebounded from lows, and oil prices retreated from highs. The White House has also outlined plans to ease energy market pressures, hinting at possible sanctions relief for some Iranian oil exports.

Nevertheless, the Federal Reserve, European Central Bank, Bank of England, Swiss National Bank, and Bank of Japan all kept interest rates unchanged this week, with policymakers choosing to spend more time assessing the impact of the conflict.

Oil prices remained high on Friday, with little sign of easing concerns over supply disruptions caused by the Iran war.

Brent Oil Fluctuations

Brent crude futures hovered around $107 per barrel. Earlier this week, following attacks on South Pars and Iran’s response, the global benchmark oil price surged to about $119 per barrel.

Concerns arose over mutual bombings of key energy infrastructure, and even if the US and allies successfully reopen the vital shipping route through the southern Strait of Hormuz, supply disruptions could persist long-term.

Qatar’s main natural gas facility, Ras Laffan, was struck by Iran, which said its export capacity had decreased by 17%, with repairs potentially taking up to five years. As a major natural gas exporter—especially to Europe—European gas benchmark prices soared, raising inflation worries.

The New York Times reported that Iran continued retaliatory strikes, with US-allied Middle Eastern countries facing drone and missile threats. After missile alerts sounded overnight in Jerusalem and northern Israel, Israel launched strikes against Tehran.

The Wall Street Journal cited a statement from Iran’s Supreme Leader, Ayatollah Ali Khamenei, saying, “We must take security away from our domestic and foreign enemies and give it to our people.” This provocative message comes as Iran’s regime faces systematic attacks by Israel aimed at toppling its government.

Israeli Prime Minister Benjamin Netanyahu confirmed that US President Donald Trump had asked Israel to pause future attacks on Iran’s energy infrastructure.

The White House has been eager to reassure markets tense from prolonged oil price shocks. US Treasury Secretary Janet Yellen hinted that Washington might release more emergency oil reserves or lift sanctions on some Iranian crude exports to help ease supply constraints.

The Wall Street Journal quoted US military officials saying that Washington and its allies are increasing efforts to reopen the Strait of Hormuz. If the danger of attacks on ships passing through the strait is reduced, US warships might escort vessels in and out of the Persian Gulf, one of the world’s most critical energy production regions.

Vital Knowledge analysts stated in a report: “The key remains the Strait of Hormuz. Without a sharp escalation of war involving thousands of soldiers or a diplomatic resolution, there is no fully reopened solution for the waterway, and timing is critical.” They warned that Saudi Arabia cautioned that if the conflict does not end before April, oil prices could rise above $180 per barrel.

However, some analysts note that even if Iran’s control over the strait is lifted, attacks on production facilities could continue to pressure global supplies.

Trump vowed to take all necessary measures to help de-escalate the crisis and assured Americans that “it will end soon.”

He also said there are no plans to deploy ground troops to the conflict zone, though when asked about possible land operations, Trump told a reporter, “If I do that, I won’t tell you.”

Gold Prices Slightly Rise

On Friday, gold prices held a modest gain during European trading hours but still digested this week’s sharp decline amid rising inflation expectations due to the US and Israel’s war with Iran, which dampened bets on rate cuts.

On Thursday, gold plunged after several major central banks expressed caution about the inflation impact of the Iran conflict. This further fueled expectations that rate cuts are unlikely in the near term—bad news for precious metals.

A weaker dollar provided some relief for gold, with the dollar heading for its first weekly decline in three weeks. After several central banks announced plans to raise interest rates in response to rising energy prices, the dollar underperformed compared to other major developed currencies.

Fed Surges

Additionally, FedEx raised its full-year profit outlook after reporting third-quarter earnings and revenue that exceeded expectations, driven by strong demand during key holiday periods.

Notably, the company said its forecast does not assume any additional disruptions from geopolitical turmoil but warned that increased air freight costs and rerouted routes due to the Iran war could weaken quarterly returns.

While FedEx may be forced to raise customer fees to offset soaring fuel costs caused by the conflict, this could lead consumers to cut back on shipping expenses.

However, CFO John Ditrich told Reuters that FedEx has not seen its air fuel supplies affected by fighting.

FedEx shares rose over 9% in pre-market trading in the US.

This article was translated with the assistance of artificial intelligence. For more information, see our Terms of Use.