Futures tied to Canada’s primary stock index moved higher on Monday, lifted in part by a rise in bullion after Pakistan reported that Washington and Tehran had reached an interim accord to stop fighting.
By 07:38 ET (11:38 GMT), the S&P/TSX 60 index standard futures contract had advanced 19 points, or 0.9%.
In the prior session on Friday, the TSX composite index closed up 0.8% at 34,937.85, capping the week on a positive note and leaving the benchmark not far from its record highs.
Broader U.S. and global equity momentum
U.S. stock index futures were firmer on Monday, positioning Wall Street for a strong start after technology-led rallies in both European and Asian trading venues. Major U.S. averages posted gains last week, helped by growing optimism about an imminent deal between the United States and Iran and a notable surge in shares tied to SpaceX after its high-profile public debut.
Shares associated with SpaceX jumped above the $135 IPO price, valuing Elon Musk’s reusable rocket business at more than $2 trillion and ranking it among the largest publicly traded U.S. companies by market value. That flotation also lifted other aerospace and satellite firms, with space-sector names such as Rocket Lab and Planet Labs rallying in the wake of the listing.
Details on the U.S.-Iran agreement
Pakistan, which has frequently acted as a mediator in the conflict, said the two countries had reached a memorandum of understanding that is due to be signed in Switzerland on Friday. Pakistani Prime Minister Shehbaz Sharif said the two states have "declared the immediate and permanent termination of military operations on all fronts," a statement that explicitly included Lebanon.
At the same time, both the United States and Iran have not released detailed terms of the accord. Tehran has indicated the memorandum will not take effect until it is formally signed. Tensions around the deal briefly rose when Israel carried out strikes on Iran-backed Hezbollah in Lebanon over the weekend, drawing a sharp rebuke of Israeli Prime Minister Benjamin Netanyahu from U.S. President Donald Trump.
President Trump said the arrangement would halt hostilities and enable the reopening of the Strait of Hormuz - a major shipping lane off Iran’s southern coast through which roughly a fifth of global oil had flowed before the conflict began in late February. In a social media post, he said the strait would be reopened on Friday, noting a need for mine-clearing operations, and added that a long-standing U.S. naval blockade of Iranian ports would be lifted.
Commodity and currency responses
News of the tentative peace accord prompted Brent crude futures, the global oil benchmark, to slide, relieving some concerns about a prolonged energy-driven inflation shock that might prompt a more hawkish shift by central banks worldwide. The decline in oil prices was one factor helping to ease worries of a sustained spike in inflation tied to energy.
Gold prices advanced on the developments. Spot gold rose to its highest level since June 9 and extended gains for a third consecutive session, while gold futures also moved higher. One supporting factor for bullion was a softer U.S. dollar, which fell to a 10-day low against major peers. The dollar’s prior role as a relative safe haven during the conflict made it vulnerable once risk sentiment improved on signs of de-escalation. Because gold pays no yield, a weaker dollar can make it less costly for holders of other currencies and often supports demand.
At the same time, lower oil prices can alleviate pressure on central banks to tighten policy aggressively in response to energy-driven inflation, a dynamic that can help non-yielding assets such as gold outperform compared with periods of elevated rates.
U.S. government bond yields declined alongside the move into risk assets, a pattern consistent with bond prices rising as yields fall. The drop in yields added additional support to equity markets.
Market probabilities and the Fed meeting
Markets have also been re-pricing expectations for U.S. monetary policy. Traders now assign a 49% probability to a Federal Reserve interest rate increase by December, down from 69% a week earlier, according to the CME FedWatch Tool. The Fed is set to conclude a two-day policy meeting on Wednesday, and prevailing bets have shifted toward the central bank holding rates steady at that meeting.
Wagers earlier in the year that the Fed would implement rate cuts in 2026 have largely been abandoned, particularly after recent data signaled an acceleration in inflation. Analysts at Vital Knowledge said it remains likely that any easing bias will be removed from the Federal Open Market Committee statement. They added that the new Fed chair, Kevin Warsh, faces a delicate balance between faster price growth and external political pressure for aggressive rate cuts. Those analysts suggested Warsh could influence the post-decision tone at the press conference, potentially nudging guidance in a dovish direction by reiterating that several Fed members have signaled rate reductions could be warranted if the Iran conflict is resolved.
Assets and names in focus
- Gold-related instruments - spot gold and futures both climbed, with spot gold hitting its strongest level since June 9.
- Energy - Brent crude futures eased on the news, reflecting reduced near-term supply concerns tied to hostilities in the Persian Gulf region.
- Space and satellite equities - shares tied to SpaceX surged after its market debut and lifted peers, including Rocket Lab and Planet Labs.
- Canadian equities - S&P/TSX 60 futures and the broader TSX composite were higher, reflecting improved risk appetite and commodity-market moves.
What investors are watching next
With market sentiment improved by reports of a temporary end to hostilities, traders will be closely monitoring the formal signing of the memorandum in Switzerland on Friday and any details released by either the U.S. or Iranian governments. The Federal Reserve’s policy decision and accompanying communication later this week are also front and center for investors, given the recent shifts in rate expectations and inflation readings.
For now, equities, bullion, the dollar and bond yields are all reacting to a mix of geopolitical developments and evolving monetary-policy prospects, leaving markets attentive to both political confirmations of the deal and the Fed’s guidance following its meeting.