Futures tied to Canada's main stock index and major Wall Street benchmarks fell on Wednesday as elevated bond yields and rising oil prices weighed on sentiment. Traders are now awaiting minutes from the Federal Reserve's latest policy meeting, while gold retreated on a stronger dollar.
Canadian and U.S. futures slide
Futures linked to the S&P/TSX 60 index dropped 12 points, or 0.6% on Wednesday. The move came a day after the S&P/TSX composite index rose 0.4% to 35,649.51, its highest close since September 25.
Utilities and metal mining stocks led Tuesday's gains, and traders also weighed a deal to create a major Canadian power provider. Emera agreed to buy Canadian Utilities in a stock deal worth C$14.3 billion, and ATCO shares, which hold a stake in Canadian Utilities, rose more than 9%.
South of the border, Dow futures fell 255 points, or 0.5%, S&P 500 futures dropped 19 points, or 0.2%, and Nasdaq 100 futures slid 181 points, or 0.6%. The pullback followed a session in which an AI-fueled rally pushed the S&P 500 and Nasdaq Composite to fresh record closes.
Yields climb as investors eye Fed minutes
Benchmark 10-year U.S. and French bond yields moved higher again on Wednesday. According to Vital Knowledge, investors remain skeptical "this asset class can sustain a material rally," and the firm noted that a surge in artificial-intelligence spending will likely coincide with a wave of debt issuance.
Investors are now looking ahead to minutes from the Federal Reserve's September meeting. Policymakers raised interest rates at that gathering for the first time since 2023, and their projections pointed to further rate increases before year-end. Still, expectations have faded for another hike at this month's gathering, after softer-than-anticipated employment data and comments from Fed officials downplaying the need for an October move.
Oil climbs, gold retreats
Brent crude futures rose 1.2% to $101.74 a barrel, with Tuesday's rebound driven by reports on the high cost of shipping oil through the Gulf and an ongoing shortage of refined products.
Gold moved the other way. Spot gold fell 1.1% to $4,118.57, while gold futures declined 1.0% to $4,145.12, pressured by a firmer dollar. The U.S. dollar index gained 0.5% to 102.31 against a basket of peers.
Traders are also bracing for the start of quarterly earnings season, due to begin in earnest next week with reports from major Wall Street lenders. Ahead of that, Constellation Brands shares slumped in premarket trading after a cautious full-year outlook offset stronger second-quarter results, while Levi Strauss is scheduled to report later today.
Source: All News
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