On November 3, Canada's main stock index futures declined as concerns intensified over another escalation in the Middle East and rising energy prices, while investors stayed cautious ahead of the U.S. midterm elections.
As of 22:10 Beijing time on the 3rd, Canada's S&P/TSX 60 index futures were down 23 points, a drop of about 1%. Earlier, Canada's S&P/TSX Composite Index closed higher on Monday after a brief pullback in international oil prices eased market worries about energy-driven inflation, combined with gains in metals and mining shares.
U.S. forces reported to have struck Iran's Qeshm Island, oil price rebound fuels inflation concerns
International oil prices rebounded on Tuesday after reports that U.S. forces launched limited military strikes on Iran's Qeshm Island in the Strait of Hormuz, reigniting concerns about disruptions to Middle East crude supply. Previously, international oil prices fell sharply on Monday, mainly driven by expectations of progress in U.S.-Iran diplomatic talks. However, with news of new military action, the energy market is once again facing uncertainty.
The ongoing Middle East conflict continues to push up gasoline and diesel prices, also intensifying market concerns about inflation and the future path of interest rates.
U.S. midterm elections approach, expectations for a Bank of Canada rate hike this year rise
The U.S. midterm elections are being held on November 3, with control of the Senate and House of Representatives becoming the focus of market attention. The election results could affect the Trump administration's fiscal, regulatory and trade policies over the next two years, and investors are staying cautious before the results are announced.
On Canadian monetary policy, the market is watching remarks by Bank of Canada Governor Macklem when he appears before the House of Commons Finance Committee this week. The latest market pricing shows traders now expect the Bank of Canada to raise interest rates before the end of 2026, and continued energy price increases and cross-border trade uncertainty could further affect the monetary policy outlook.
Meanwhile, U.S. stock index futures showed mixed performance. As of 7:24 a.m. Eastern Time on Tuesday, S&P 500 futures were down 0.1%, Dow futures were down 0.7%, and Nasdaq 100 futures were up 0.3%.
Among technology stocks, Apple fell more than 3% in premarket trading due to rising memory chip costs and gross margin guidance missing market expectations; Palantir fell more than 7% in premarket trading amid concerns over slowing future contract growth.
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