Global stock markets rallied, driven by optimism following a framework peace deal between the United States and Iran. Investors are hopeful this development will lessen inflationary pressures and reduce the likelihood of higher interest rates. Major North American indexes concluded the previous week positively, leading to a surge in Wall Street futures.
Market Reactions in North America
As of 8:24 a.m. ET, key futures showed significant gains:
- Dow futures increased by 0.9%
- S&P 500 futures rose by 1.23%
- Nasdaq futures climbed 2.07%
- TSX futures were up 0.8%
In Canada, investors are paying close attention to results from Canopy Growth Corp. Analysts predict that the reopening of the Strait of Hormuz will act as a stimulus for the markets.
International Markets Overview
The pan-European STOXX 600 index recorded a morning rise of 0.67%. Key European indices also performed well:
- Britain’s FTSE 100 saw a slight increase of 0.09%
- Germany’s DAX rose by 1.36%
- France’s CAC 40 gained 1.21%
In Asia, Japan’s Nikkei index surged by 4.99%, while Hong Kong’s Hang Seng index rose by 0.50%.
Commodity Market Updates
Oil prices experienced a significant drop, reaching a three-month low. Following the U.S.-Iran deal, Brent crude futures fell by 5.1% to US$82.86 per barrel, and U.S. West Texas Intermediate declined 5.8% to US$79.98 per barrel. Analyst Tamas Varga commented on the potential for a supply deficit extending into 2026 as traffic resumes at the Strait of Hormuz.
In contrast, gold prices climbed, with spot gold rising 2.8% to US$4,336.49 per ounce. U.S. gold futures for August delivery increased by the same percentage, reaching US$4,358.00.
Currency and Bond Market Movement
The Canadian dollar strengthened against the U.S. dollar, trading in the range of 71.44 to 71.68 US cents early in the session. Despite this, the loonie had depreciated approximately 1.66% over the past month against the greenback. The U.S. dollar index subsequently fell by 0.27% to 99.225.
Notable Corporate Developments
JPMorgan Chase & Co. announced its plans to extend its US$1.5-trillion economic security initiative into Canada. This initiative aims to support key sectors such as energy, defense, and critical minerals with substantial new financing.
Upcoming Economic Data Releases
Investors should be aware of the following economic reports due for release:
- Euro area industrial production and trade surplus data at 8:15 a.m. ET
- Canada housing starts for May, with a consensus drop of 8.6% expected
- Canadian manufacturing sales and new orders for April, anticipated to increase by 4.5%
- U.S. industrial production and capacity utilization for May at 9:15 a.m. ET
These insights could provide crucial information for Canadian investors ahead of the market open.
