Canada’s main stock index gained over 150 points in late-morning trading on Friday. The S&P/TSX composite index was up 158.74 points at 26,656.31. Technology and telecommunication stocks helped drive the increase.
Investors were waiting for Iran’s response to U.S. attacks on three nuclear sites in the country over the weekend. In New York, the Dow Jones Industrial Average rose 116.26 points to 42,323.08. The S&P 500 index climbed 30.92 points to 5,998.76.
The Nasdaq Composite gained 121.23 points, reaching 19,568.64. The Canadian dollar was unchanged at 72.84 cents US compared to Friday. In commodity markets, the August crude oil contract fell 82 cents US to US$73.02 per barrel.
The August gold contract rose US$15.30 to US$3,401.00 an ounce. On Tuesday morning, TSX futures were up due to a ceasefire agreement between Iran and Israel. The deal has significantly improved market sentiment.
In Toronto, business activities seemed unaffected by the global tension that led to the ceasefire. Investors are now looking at the potential positive impacts on regional stability and international financial markets. With the dollar poised for its worst first-half performance since 1986, markets are closely watching developments across asset classes.
The geopolitical de-escalation in the Middle East has strongly boosted futures. Global shares increased on Tuesday after U.S. President Donald Trump announced a new agreement with Iran. However, the deal seemed shaky with Israel saying Iran fired more missiles early on Tuesday.
Iran denied any ceasefire violations. Risk assets rallied on the initial announcement. Wall Street and TSX futures moved upwards.
“Investors mostly shrugged at what appeared on the surface a seismic geopolitical event over the weekend, and those who kept their nerve have so far been proven right,” said Kenneth Broux, head of corporate research FX and rates at Societe Generale.
TSX supported by technology stocks
In Canada, investors are waiting for results from BlackBerry Ltd.
Traders are also watching May inflation data. Economists expect the annual pace of inflation to have stayed at 1.7 percent last month. On Wall Street, markets are focused on upcoming earnings reports from Carnival Corp. and FedEx Corp. Overseas, the pan-European STOXX 600 was up 1.29 percent in midday trading. Britain’s FTSE 100 rose 0.34 percent, Germany’s DAX gained 1.93 percent, and France’s CAC 40 increased by 1.28 percent.
In Asia, Japan’s Nikkei closed 1.14 percent higher. Hong Kong’s Hang Seng surged 2.06 percent. Commodities showed volatility after Israel accused Iran of missile fire and vowed retaliation.
Brent crude futures fell $2.48 to $69 a barrel. West Texas Intermediate crude dropped $2.37 to $66.14. “The geopolitical premium has deflated, but tensions between Israel and Iran remain unresolved,” said SEB analyst Ole Hvalbye.
Spot gold was down 1.2 percent to $3,326.87 an ounce. The Canadian dollar strengthened against its U.S. counterpart, trading between 72.78 US cents and 72.96 US cents in early trading. The loonie was up about 0.67 percent over the past month.
The U.S. dollar index lost 0.36 percent to 98.06. The euro gained 0.18 percent to $1.1599. The British pound increased 0.62 percent to $1.3607.
The yield on the U.S. 10-year note was flat at 4.349 percent ahead of the North American opening bell. Several key economic indicators are set to be released today, including Germany’s business climate, Canadian CPI and manufacturing sales for May, U.S. current account deficit for Q1, home price indexes, and consumer confidence. Additionally, U.S. Federal Reserve Chair Jerome Powell will testify on the semiannual monetary policy report to the House Financial Services Committee.
A NATO summit will also be held in The Hague, Netherlands, through Wednesday.