Wall Street Might Open on a Weaker Note

The S&P/TSX Composite Index is expected to open on a weaker note following the recent market sell-off, reflecting continued softness in investor sentiment.

Jobless Claims for the week and fed speeches might get attention on Thursday. The Middle East conflict continue to disturb market sentiments. Investors have lost hope of a de-escalation in the U.S.-Iran conflict and uncertainty might drag on.

However, from a technical standpoint, the index remains below a key rising trendline resistance near 32,650, signalling persistent near-term weakness in the broader market structure. As long as the index trades below this level, downside risks may continue, potentially leading to extended consolidation or further corrective movement. Immediate resistance is seen around 32,650, and failure to reclaim this level could keep the overall market tone cautious in the near term. 

Global equities are showing mixed signals ahead of the North American session:

Global markets are offering a cautious tone ahead of the North American open:

• U.S. equities ended mixed in the previous session as investors reacted to softer-than-expected manufacturing data alongside resilient labor market indicators.
• Federal Reserve commentary continues to reinforce a data-dependent stance, with markets pricing in a slower pace of rate cuts amid sticky inflation.
• European markets are trading slightly lower, pressured by weaker industrial data and ongoing concerns about economic momentum.
• Asian equities closed mixed, with China showing modest gains supported by policy stimulus expectations, while Japan lagged on currency volatility.

Global bond yields remain elevated, keeping pressure on equity valuations and influencing capital flows across sectors.

Macro News Impacting the TSX

The TSX Composite is likely to see sector-driven movement at the open:

• Investors are watching Canadian GDP and inflation signals, which could shape expectations around the Bank of Canada’s next policy move.
• Domestic equities continue to take cues from commodity prices and global macro trends, particularly developments in the U.S. and China.

Commodity view — what to watch

• Crude oil: WTI crude futures rose above $94 per barrel on Thursday, recovering the previous session’s losses amid conflicting statements from the US and Iran on efforts to end the conflict that has roiled global energy markets.
• Gold: Gold fell below $4,500 per ounce on Thursday, giving back gains from the past two sessions as conflicting statements from the US and Iran over potential peace talks continued to unsettle financial markets. 
• Silver: Silver fell below $70 per ounce on Thursday, trimming recent gains as conflicting statements from the US and Iran over potential peace talks continued to unsettle financial markets.

• Base metals: Copper dropped more than 1% to around $5.45 per pound on Thursday, reversing gains from the previous session as conflicting statements from the US and Iran over potential peace talks weighed on metals markets. 

Sector highlights

• Energy: Likely to remain resilient with oil prices holding steady.
• Materials: Supported by strength in gold and base metals, particularly copper.
• Financials: Sensitive to bond yield movements and interest rate expectations.
• Technology & Industrials: Expected to track broader global market sentiment and macro signals. 

Forex watch

• The Canadian dollar (CAD) is trading relatively flat against the U.S. dollar.
• Oil price stability is helping support the currency, though broader U.S. dollar strength is limiting gains.
• Currency trends will continue to influence export-oriented sectors and commodity producers.

Bottom line:

The TSX Composite is poised for a cautious and potentially range-bound open, with commodity strength providing a floor for the index. Energy and materials sectors are expected to lead early moves, while financials and growth stocks may remain sensitive to macroeconomic developments.

Investors are likely to remain selective, focusing on commodity-linked opportunities while keeping a close eye on global economic signals and central bank guidance. Volatility may persist as markets navigate mixed economic data and evolving policy expectations.