Futures tied to Canada’s principal stock index strengthened on Wednesday as investors appeared to respond positively to reports that mediators are arranging talks aimed at de-escalating the nearly month-old conflict involving Iran.
By 08:03 ET (12:03 GMT), the S&P/TSX 60 index standard futures contract was up 27 points, or 1.4%. The broader S&P/TSX composite index had climbed 0.2% on Tuesday to finish at 31,941.59, extending gains from the prior session. Despite the uptick, the composite remains 7.5% below its record high reached on March 2.
U.S. futures and recent Wall Street action
U.S. index futures also moved higher early Wednesday. At 07:11 ET, Dow futures were up 439 points, or 1.0%, S&P 500 futures had risen 58 points, or 0.9%, and Nasdaq 100 futures were 250 points higher, or 1.0%.
On Tuesday, the main averages on Wall Street slipped as investors weighed the prospects for a halt to hostilities between joint U.S.-Israeli forces and Iran. Fighting has continued while the U.S. has started to dispatch additional military units to the Middle East. Some Washington allies in the Persian Gulf have reportedly urged President Donald Trump to continue military action.
Tehran has dismissed the president's claim that "very strong" negotiations have recently taken place, accusing him of attempting to calm volatile financial markets by promoting the possibility of talks. Adding to investor concern, preliminary U.S. business activity data for March showed strains: S&P Global’s flash purchasing managers index fell to an eleven-month low and indicated rising price pressures linked to an energy shock associated with the conflict.
Activity data from the Eurozone also signaled widening risks to growth, with separate PMIs described as warning of "ringing stagflation alarm bells" - a combination of persistent inflation and stagnant growth.
Reports of mediation and a 15-point U.S. proposal
Market optimism on Wednesday was driven in part by media reports that mediators from Turkey, Egypt and Pakistan were attempting to arrange talks between U.S. and Iranian officials by Thursday. Those reports said the U.S. presented Tehran with a 15-point plan that included demands such as dismantling Iran's main nuclear sites and reopening the Strait of Hormuz, a waterway that has been effectively closed to tanker traffic for weeks and that has contributed to elevated energy prices.
Reports indicated Iran has set a high threshold for engagement in negotiations, including a proposal to establish fee collection from ships traversing the strait. An Iranian military spokesperson reportedly suggested the U.S. is effectively "negotiating with" itself, a comment that undercut hopes of an immediate breakthrough.
Commodities and currencies
The reported prospect of talks and indications of a path off the battlefield coincided with a decline in oil prices. By 07:16 ET, Brent crude futures for May delivery were down 6.4% at $97.78 a barrel, slipping back below the $100-a-barrel level but remaining well above pre-war levels of about $70 a barrel.
Gold benefited from the fall in oil and a slightly weaker U.S. dollar, though gains were capped by lingering geopolitical risk. Spot gold rose 1.8% to $4,553.25 an ounce by 06:48 ET (10:48 GMT), while U.S. gold futures were up 3.5% at $4,587.82.
Lower energy costs can reduce bond yields and put downward pressure on the dollar, tendencies that typically favor non-yielding assets such as gold. The U.S. dollar index, which measures the currency against a basket of six peers, fell 0.1% in early trading. Analysts at ING noted that "easing oil prices and a softer U.S. dollar added support" to precious metals, while cautioning that gold remains "highly sensitive" to currency moves, geopolitical developments and expectations for Federal Reserve responses to energy-driven inflation.
Equity movers
In premarket U.S. trading, major oil companies reacted to the slide in crude. Chevron and Exxon Mobil each fell by more than 1%. Travel-related names, by contrast, saw gains: United Airlines, Delta Air Lines and other travel stocks rose, reflecting investor preference for cyclical exposure as geopolitical risk indicators eased. Cruise operator Carnival Corp. also ticked higher.
Gold and silver mining stocks, which had been pressured by a retreat in precious metal prices earlier in the conflict, showed signs of recovery along with bullion.
Earnings and corporate deals
Chewy reported fourth-quarter adjusted earnings that materially surpassed analyst expectations, sending the online pet supplies retailer's shares sharply higher in premarket trading. The company posted adjusted earnings per share of $0.27 for the fourth quarter versus the analyst consensus of $0.09. Revenue for the period reached $3.26 billion, in line with analyst estimates, representing an 8.1% increase on a normalized 13-week basis compared with the prior year period.
Separately, Merck said it had agreed to acquire Terns Pharma in a deal valued at $6.7 billion, a move described by the company as intended to bolster its cancer treatment pipeline.
Market context and lingering uncertainty
While early trading favored risk assets amid reports of potential diplomacy, messaging from the involved parties remained mixed. That inconsistency, together with ongoing military activity and elevated energy prices earlier in the conflict, has kept investors alert to the possibility of renewed volatility. The interaction between commodity prices, currency moves and central bank policy expectations continues to be a key channel through which the conflict could influence broader economic activity.
For now, futures in Canada and the U.S. signaled a risk-on tilt as markets awaited further confirmation on whether planned talks and the U.S. 15-point proposal will produce any de-escalation on the ground.
Summary - Futures linked to Canada’s main equity index rose after reports that mediators were arranging talks between U.S. and Iranian officials and that the U.S. presented a 15-point plan. The news pressured oil, supported gold and pushed U.S. futures higher, while company-specific moves included Chewy's strong quarterly results and Merck's $6.7 billion acquisition of Terns Pharma.