S&P/TSX Composite Index might Open on a Positive note

The S&P/TSX Composite Index is expected to open on a positive note, supported by sector-specific gains in technology and energy from the previous session.

From a technical perspective, the index is hovering near a key rising trendline resistance around the 34,300 level, indicating ongoing fragility in the near-term structure. As long as this level remains unbroken, the overall bias is likely to stay cautious, with scope for further consolidation or a mild corrective phase. Immediate support is seen near 33,900, and a sustained break below this level could weaken sentiment and trigger additional selling pressure in the sessions ahead.

Global Market Sentiment

Overnight, Asian markets traded mixed, while European equities showed mild weakness in early sessions. Investors continue to balance risk exposure amid uncertainty surrounding geopolitical developments and their potential impact on energy markets.

U.S. futures are slightly subdued ahead of the open, suggesting North American markets—including the TSX—could see a muted or slightly negative start. Market participants remain cautious ahead of key economic data releases and central bank commentary expected later this week.

Iran Tensions and Geopolitical Developments

The geopolitical backdrop remains a key driver of market sentiment. Recent developments involving Iran have heightened concerns over potential supply disruptions in global oil markets.

While the situation has not escalated into a full-scale conflict, elevated tensions continue to support crude oil prices and increase volatility across asset classes. Investors are closely monitoring:

• Potential disruptions in key shipping routes
• Any escalation involving regional energy infrastructure
• Diplomatic responses from global powers

For Canadian markets, which are heavily weighted toward energy and materials, these developments can have a dual impact—supporting commodity prices while increasing broader market uncertainty. 

Macro and Economic Factors

Interest Rate Outlook

Markets continue to assess the path of central bank policy. While inflation has moderated in some regions, uncertainty remains about the timing and pace of rate cuts.

Higher-for-longer interest rates could:

• Pressure equity valuations
• Strengthen the Canadian dollar
• Impact borrowing-sensitive sectors

Currency Movements

The Canadian dollar is showing modest strength, supported by higher oil prices. A stronger loonie can:

• Benefit importers
• Weigh slightly on export-oriented sectors 

Commodity Market View

• Crude: WTI crude futures slipped toward $91 per barrel on Friday, retreating after a 3.7% gain in the prior session as President Donald Trump struck an optimistic tone about the chances of a lasting US-Iran ceasefire. 
• Gold: Gold held steady near $4,800 an ounce on Friday and was on track for a fourth consecutive weekly advance, as prospects for a permanent ceasefire agreement between the US and Iran helped ease concerns over inflation and central bank rate hikes. 
• Silver: Silver held steady near $79 an ounce on Friday and was on track for a fourth consecutive weekly advance, as prospects for a permanent ceasefire agreement between the US and Iran helped ease concerns over inflation and central bank rate hikes.
• Copper: Copper futures held above $6 per pound on Friday and were on track for a fourth consecutive weekly gain, supported by renewed buying interest from Chinese consumers as fabricators took advantage of softer prices.

Economic Data Watch

Investors are looking ahead to upcoming economic releases, including:

• Inflation data
• Employment figures
• Central bank commentary

These indicators will shape near-term market direction.

Outlook

Markets are likely to remain headline-driven, particularly with ongoing Iran-related developments. Volatility may persist throughout the session, especially if there are updates affecting oil supply or geopolitical stability.

Investors may prefer a selective approach, focusing on sectors with strong commodity exposure while remaining cautious on rate-sensitive and cyclical stocks.