TSX futures slip as traders eye oil price surge, incoming U.S. inflation data

Futures linked to Canada's primary equity benchmark moved lower on Wednesday, as crude prices advanced past the psychologically significant $100-per-barrel level, a climb that threatens to heighten inflation concerns.

At the same time, the escalating trade conflict between the U.S. and Canada further darkened the outlook. Washington imposed a new ban on certain Canadian imports, following Ottawa's retaliatory tariffs on a set of American goods, which took effect just after midnight.

By 06:52 ET (10:52 GMT), the S&P/TSX 60 index futures contract had slipped by 8 points, or 0.4%.

The S&P/TSX composite index retreated on Tuesday, driven down largely by a decline in financial stocks, while the industrials segment also weakened. E-commerce company Shopify's shares dropped as well, reaching their lowest closing level since July 29.

U.S. futures muted

American stock futures hovered below the flatline. As of 06:13 ET, S&P 500 futures had fallen 19 points (0.3%), Nasdaq 100 futures were down 134 points (0.5%), and Dow Jones futures had declined 206 points (0.4%).

The cautious tone followed a broad selloff during Tuesday's regular session. The blue-chip Dow Jones Industrial Average slid 1.2%, the benchmark S&P 500 lost 0.6%, and the tech-heavy Nasdaq Composite fell 0.3%.

Oil remained one of the main concerns for investors. Brent crude was last trading around $100.70 per barrel.

Iran's paramilitary Islamic Revolutionary Guard Corps (IRGC) said it launched strikes on a base in Jordan used by the American military and targeted ten ships on Wednesday. Tehran suggested the attacks caused heavy damage, but Jordanian officials reported that 18 of the 20 Iranian missiles were intercepted, while the remaining two landed in uninhabited areas.

The IRGC added that two U.S. vessels and eight oil tankers were targeted as they attempted to pass through a 'prohibited and unsafe' section of the Strait of Hormuz, a critical waterway for global shipping that has been effectively closed to commercial traffic throughout the conflict.

The bombardments followed a U.S. attack that destroyed five Iranian oil tankers, intensifying what has been a six-month stalemate with Tehran.

With both sides trading more strikes, hopes for an imminent resolution have faded. Speaking during a visit to Colombia, U.S. Secretary of State Marco Rubio indicated that the reciprocal attacks are unlikely to halt soon, warning Iran that it will 'lose tankers' when it attempts to 'hit U.S. naval ships.'

Gold climbs

Elsewhere, gold prices moved higher, supported by a subdued U.S. dollar, while the U.S. interest-rate outlook remained in focus ahead of key inflation data due later this week.

By 05:25 ET, spot gold had risen 1.0% to $4,397.47 an ounce, and gold futures had ticked up 0.1% to $4,441.86 an ounce.

The U.S. dollar index, which gauges the greenback against a basket of major currencies, was little changed at 98.77. Analysts cited by Reuters have pointed to the Japanese yen's strength over the past week as the primary factor behind the dollar's relative softness.

A weaker dollar can boost gold by making the metal less expensive for overseas purchasers.

The surge in oil prices threatens to magnify concerns about energy-driven inflation ahead of a batch of central bank interest-rate decisions in the coming days.

Markets currently price in roughly a 60% chance that the Federal Reserve will raise rates by 25 basis points next Wednesday, up from 40% a week earlier. Policymakers have suggested they want to prioritize curbing inflation, while fresh signs of labor-market strength have seemingly strengthened the case for higher borrowing costs.

In theory, lifting interest rates can temper inflation, though with the risk of harming employment and broader economic growth.